Correlation Between Grupo Bimbo and Scepter Holdings
Can any of the company-specific risk be diversified away by investing in both Grupo Bimbo and Scepter Holdings 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 Scepter Holdings 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 Scepter Holdings, you can compare the effects of market volatilities on Grupo Bimbo and Scepter Holdings 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 Scepter Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Bimbo and Scepter Holdings.
Diversification Opportunities for Grupo Bimbo and Scepter Holdings
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Scepter is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and Scepter Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scepter Holdings 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 Scepter Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scepter Holdings has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and Scepter Holdings go up and down completely randomly.
Pair Corralation between Grupo Bimbo and Scepter Holdings
Assuming the 90 days horizon Grupo Bimbo SAB is expected to generate 0.2 times more return on investment than Scepter Holdings. However, Grupo Bimbo SAB is 5.05 times less risky than Scepter Holdings. It trades about -0.04 of its potential returns per unit of risk. Scepter Holdings is currently generating about -0.08 per unit of risk. If you would invest 322.00 in Grupo Bimbo SAB on August 25, 2024 and sell it today you would lose (17.00) from holding Grupo Bimbo SAB or give up 5.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Grupo Bimbo SAB vs. Scepter Holdings
Performance |
| Timeline |
| Grupo Bimbo SAB |
| Scepter Holdings |
Grupo Bimbo and Scepter Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Bimbo and Scepter Holdings
The main advantage of trading using opposite Grupo Bimbo and Scepter Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Bimbo position performs unexpectedly, Scepter Holdings 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 Scepter Holdings will offset losses from the drop in Scepter Holdings' 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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