Correlation Between GMxico Transportes and Nemak S
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes and Nemak S 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 Nemak S 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 Nemak S A, you can compare the effects of market volatilities on GMxico Transportes and Nemak S 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 Nemak S. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Nemak S.
Diversification Opportunities for GMxico Transportes and Nemak S
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GMxico and Nemak is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and Nemak S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nemak S A 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 Nemak S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nemak S A has no effect on the direction of GMxico Transportes i.e., GMxico Transportes and Nemak S go up and down completely randomly.
Pair Corralation between GMxico Transportes and Nemak S
Assuming the 90 days trading horizon GMxico Transportes SAB is expected to generate 0.55 times more return on investment than Nemak S. However, GMxico Transportes SAB is 1.82 times less risky than Nemak S. It trades about 0.15 of its potential returns per unit of risk. Nemak S A is currently generating about -0.23 per unit of risk. If you would invest 2,942 in GMxico Transportes SAB on September 1, 2024 and sell it today you would earn a total of 151.00 from holding GMxico Transportes SAB or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMxico Transportes SAB vs. Nemak S A
Performance |
| Timeline |
| GMxico Transportes SAB |
| Nemak S A |
GMxico Transportes and Nemak S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMxico Transportes and Nemak S
The main advantage of trading using opposite GMxico Transportes and Nemak S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes position performs unexpectedly, Nemak S 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 Nemak S will offset losses from the drop in Nemak S's long position.| GMxico Transportes vs. Cognizant Technology Solutions | GMxico Transportes vs. McEwen Mining | GMxico Transportes vs. DXC Technology | GMxico Transportes vs. Micron Technology |
| Nemak S vs. CEMEX SAB de | Nemak S vs. Grupo Financiero Banorte | Nemak S vs. Grupo Bimbo SAB | Nemak S vs. Fomento Econmico Mexicano |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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