Correlation Between Grupo Gigante and Select Sector
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By analyzing existing cross correlation between Grupo Gigante S and The Select Sector, you can compare the effects of market volatilities on Grupo Gigante and Select Sector and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Grupo Gigante with a short position of Select Sector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Gigante and Select Sector.
Diversification Opportunities for Grupo Gigante and Select Sector
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and Select is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Gigante S and The Select Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Sector and Grupo Gigante is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Grupo Gigante S are associated (or correlated) with Select Sector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Sector has no effect on the direction of Grupo Gigante i.e., Grupo Gigante and Select Sector go up and down completely randomly.
Pair Corralation between Grupo Gigante and Select Sector
Assuming the 90 days trading horizon Grupo Gigante S is expected to under-perform the Select Sector. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Gigante S is 2.29 times less risky than Select Sector. The stock trades about -0.22 of its potential returns per unit of risk. The The Select Sector is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 159,394 in The Select Sector on August 29, 2024 and sell it today you would earn a total of 11,258 from holding The Select Sector or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Grupo Gigante S vs. The Select Sector
Performance |
| Timeline |
| Grupo Gigante S |
| Select Sector |
Grupo Gigante and Select Sector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Gigante and Select Sector
The main advantage of trading using opposite Grupo Gigante and Select Sector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Gigante position performs unexpectedly, Select Sector can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Select Sector will offset losses from the drop in Select Sector's long position.| Grupo Gigante vs. DXC Technology | Grupo Gigante vs. Verizon Communications | Grupo Gigante vs. Ross Stores | Grupo Gigante vs. FibraHotel |
| Select Sector vs. The Select Sector | Select Sector vs. The Select Sector | Select Sector vs. The Select Sector | Select Sector vs. The Select Sector |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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