Correlation Between Gruma SAB and Grupo Aeroportuario
Can any of the company-specific risk be diversified away by investing in both Gruma SAB and Grupo Aeroportuario 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 Gruma SAB and Grupo Aeroportuario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gruma SAB de and Grupo Aeroportuario del, you can compare the effects of market volatilities on Gruma SAB and Grupo Aeroportuario 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 Gruma SAB with a short position of Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gruma SAB and Grupo Aeroportuario.
Diversification Opportunities for Gruma SAB and Grupo Aeroportuario
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gruma and Grupo is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Gruma SAB de and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and Gruma SAB 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 Gruma SAB de are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of Gruma SAB i.e., Gruma SAB and Grupo Aeroportuario go up and down completely randomly.
Pair Corralation between Gruma SAB and Grupo Aeroportuario
Assuming the 90 days trading horizon Gruma SAB de is expected to generate 1.62 times more return on investment than Grupo Aeroportuario. However, Gruma SAB is 1.62 times more volatile than Grupo Aeroportuario del. It trades about -0.08 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about -0.18 per unit of risk. If you would invest 35,176 in Gruma SAB de on August 28, 2024 and sell it today you would lose (988.00) from holding Gruma SAB de or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gruma SAB de vs. Grupo Aeroportuario del
Performance |
| Timeline |
| Gruma SAB de |
| Grupo Aeroportuario del |
Gruma SAB and Grupo Aeroportuario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gruma SAB and Grupo Aeroportuario
The main advantage of trading using opposite Gruma SAB and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gruma SAB position performs unexpectedly, Grupo Aeroportuario 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 Grupo Aeroportuario will offset losses from the drop in Grupo Aeroportuario's long position.| Gruma SAB vs. Alfa SAB de | Gruma SAB vs. Grupo Financiero Banorte | Gruma SAB vs. Fomento Econmico Mexicano | Gruma SAB vs. Grupo Mxico SAB |
| Grupo Aeroportuario vs. Grupo Financiero Inbursa | Grupo Aeroportuario vs. Kimberly Clark de Mxico | Grupo Aeroportuario vs. Grupo Televisa SAB | Grupo Aeroportuario vs. Grupo Bimbo SAB |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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