Correlation Between GMxico Transportes and Financiera Independencia
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes and Financiera Independencia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GMxico Transportes and Financiera Independencia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMxico Transportes SAB and Financiera Independencia SAB, you can compare the effects of market volatilities on GMxico Transportes and Financiera Independencia 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 GMxico Transportes with a short position of Financiera Independencia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Financiera Independencia.
Diversification Opportunities for GMxico Transportes and Financiera Independencia
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between GMxico and Financiera is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and Financiera Independencia SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financiera Independencia and GMxico Transportes 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 GMxico Transportes SAB are associated (or correlated) with Financiera Independencia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financiera Independencia has no effect on the direction of GMxico Transportes i.e., GMxico Transportes and Financiera Independencia go up and down completely randomly.
Pair Corralation between GMxico Transportes and Financiera Independencia
Assuming the 90 days trading horizon GMxico Transportes SAB is expected to generate 3.27 times more return on investment than Financiera Independencia. However, GMxico Transportes is 3.27 times more volatile than Financiera Independencia SAB. It trades about 0.01 of its potential returns per unit of risk. Financiera Independencia SAB is currently generating about -0.24 per unit of risk. If you would invest 3,200 in GMxico Transportes SAB on October 9, 2024 and sell it today you would lose (1.00) from holding GMxico Transportes SAB or give up 0.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMxico Transportes SAB vs. Financiera Independencia SAB
Performance |
| Timeline |
| GMxico Transportes SAB |
| Financiera Independencia |
GMxico Transportes and Financiera Independencia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMxico Transportes and Financiera Independencia
The main advantage of trading using opposite GMxico Transportes and Financiera Independencia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes position performs unexpectedly, Financiera Independencia 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 Financiera Independencia will offset losses from the drop in Financiera Independencia's long position.| GMxico Transportes vs. Prudential Financial | GMxico Transportes vs. Costco Wholesale | GMxico Transportes vs. Deutsche Bank Aktiengesellschaft | GMxico Transportes vs. The Bank of |
| Financiera Independencia vs. GMxico Transportes SAB | Financiera Independencia vs. McEwen Mining | Financiera Independencia vs. Prudential Financial | Financiera Independencia vs. Lloyds Banking Group |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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