Correlation Between Gruma SAB and Fomento Econmico
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By analyzing existing cross correlation between Gruma SAB de and Fomento Econmico Mexicano, you can compare the effects of market volatilities on Gruma SAB and Fomento Econmico 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 Fomento Econmico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gruma SAB and Fomento Econmico.
Diversification Opportunities for Gruma SAB and Fomento Econmico
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gruma and Fomento is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gruma SAB de and Fomento Econmico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Econmico Mexicano 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 Fomento Econmico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Econmico Mexicano has no effect on the direction of Gruma SAB i.e., Gruma SAB and Fomento Econmico go up and down completely randomly.
Pair Corralation between Gruma SAB and Fomento Econmico
Assuming the 90 days trading horizon Gruma SAB de is expected to generate 1.12 times more return on investment than Fomento Econmico. However, Gruma SAB is 1.12 times more volatile than Fomento Econmico Mexicano. It trades about 0.06 of its potential returns per unit of risk. Fomento Econmico Mexicano is currently generating about 0.03 per unit of risk. If you would invest 23,719 in Gruma SAB de on August 23, 2024 and sell it today you would earn a total of 10,937 from holding Gruma SAB de or generate 46.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gruma SAB de vs. Fomento Econmico Mexicano
Performance |
| Timeline |
| Gruma SAB de |
| Fomento Econmico Mexicano |
Gruma SAB and Fomento Econmico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gruma SAB and Fomento Econmico
The main advantage of trading using opposite Gruma SAB and Fomento Econmico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gruma SAB position performs unexpectedly, Fomento Econmico 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 Fomento Econmico will offset losses from the drop in Fomento Econmico'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 |
| Fomento Econmico vs. Grupo Financiero Banorte | Fomento Econmico vs. Alfa SAB de | Fomento Econmico vs. Grupo Mxico SAB | Fomento Econmico vs. CEMEX SAB de |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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