Correlation Between Grupo Bimbo and BioAdaptives
Can any of the company-specific risk be diversified away by investing in both Grupo Bimbo and BioAdaptives 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 BioAdaptives 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 BioAdaptives, you can compare the effects of market volatilities on Grupo Bimbo and BioAdaptives 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 BioAdaptives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Bimbo and BioAdaptives.
Diversification Opportunities for Grupo Bimbo and BioAdaptives
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and BioAdaptives is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and BioAdaptives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioAdaptives 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 BioAdaptives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioAdaptives has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and BioAdaptives go up and down completely randomly.
Pair Corralation between Grupo Bimbo and BioAdaptives
Assuming the 90 days horizon Grupo Bimbo SAB is expected to under-perform the BioAdaptives. But the pink sheet apears to be less risky and, when comparing its historical volatility, Grupo Bimbo SAB is 6.82 times less risky than BioAdaptives. The pink sheet trades about -0.11 of its potential returns per unit of risk. The BioAdaptives is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 5.75 in BioAdaptives on November 3, 2024 and sell it today you would earn a total of 4.25 from holding BioAdaptives or generate 73.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Bimbo SAB vs. BioAdaptives
Performance |
| Timeline |
| Grupo Bimbo SAB |
| BioAdaptives |
Grupo Bimbo and BioAdaptives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Bimbo and BioAdaptives
The main advantage of trading using opposite Grupo Bimbo and BioAdaptives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Bimbo position performs unexpectedly, BioAdaptives 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 BioAdaptives will offset losses from the drop in BioAdaptives' long position.| Grupo Bimbo vs. High Liner Foods | Grupo Bimbo vs. Lamb Weston Holdings | Grupo Bimbo vs. Kellanova | Grupo Bimbo vs. J J Snack |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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