Correlation Between Grupo Bimbo and Alliance Global
Can any of the company-specific risk be diversified away by investing in both Grupo Bimbo and Alliance Global 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 Grupo Bimbo and Alliance Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Bimbo SAB and Alliance Global Group, you can compare the effects of market volatilities on Grupo Bimbo and Alliance Global 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 Bimbo with a short position of Alliance Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Bimbo and Alliance Global.
Diversification Opportunities for Grupo Bimbo and Alliance Global
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and Alliance is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and Alliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Global Group and Grupo Bimbo 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 Bimbo SAB are associated (or correlated) with Alliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Global Group has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and Alliance Global go up and down completely randomly.
Pair Corralation between Grupo Bimbo and Alliance Global
Assuming the 90 days horizon Grupo Bimbo SAB is expected to under-perform the Alliance Global. In addition to that, Grupo Bimbo is 1.11 times more volatile than Alliance Global Group. It trades about -0.19 of its total potential returns per unit of risk. Alliance Global Group is currently generating about -0.13 per unit of volatility. If you would invest 817.00 in Alliance Global Group on September 12, 2024 and sell it today you would lose (56.00) from holding Alliance Global Group or give up 6.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Bimbo SAB vs. Alliance Global Group
Performance |
| Timeline |
| Grupo Bimbo SAB |
| Alliance Global Group |
Grupo Bimbo and Alliance Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Bimbo and Alliance Global
The main advantage of trading using opposite Grupo Bimbo and Alliance Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Bimbo position performs unexpectedly, Alliance Global 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 Alliance Global will offset losses from the drop in Alliance Global's long position.| Grupo Bimbo vs. High Liner Foods | Grupo Bimbo vs. Lamb Weston Holdings | Grupo Bimbo vs. Kellanova | Grupo Bimbo vs. J J Snack |
| Alliance Global vs. Arca Continental SAB | Alliance Global vs. Becle SA de | Alliance Global vs. Aquagold International | Alliance Global vs. Morningstar Unconstrained Allocation |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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