Correlation Between Gruma SAB and Grupo Industrial
Can any of the company-specific risk be diversified away by investing in both Gruma SAB and Grupo Industrial 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 Industrial 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 Industrial Saltillo, you can compare the effects of market volatilities on Gruma SAB and Grupo Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gruma SAB and Grupo Industrial.
Diversification Opportunities for Gruma SAB and Grupo Industrial
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gruma and Grupo is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gruma SAB de and Grupo Industrial Saltillo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Industrial Saltillo 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Industrial Saltillo has no effect on the direction of Gruma SAB i.e., Gruma SAB and Grupo Industrial go up and down completely randomly.
Pair Corralation between Gruma SAB and Grupo Industrial
Assuming the 90 days trading horizon Gruma SAB is expected to generate 2.77 times less return on investment than Grupo Industrial. In addition to that, Gruma SAB is 1.31 times more volatile than Grupo Industrial Saltillo. It trades about 0.08 of its total potential returns per unit of risk. Grupo Industrial Saltillo is currently generating about 0.29 per unit of volatility. If you would invest 1,670 in Grupo Industrial Saltillo on October 25, 2024 and sell it today you would earn a total of 104.00 from holding Grupo Industrial Saltillo or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gruma SAB de vs. Grupo Industrial Saltillo
Performance |
| Timeline |
| Gruma SAB de |
| Grupo Industrial Saltillo |
Gruma SAB and Grupo Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gruma SAB and Grupo Industrial
The main advantage of trading using opposite Gruma SAB and Grupo Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gruma SAB position performs unexpectedly, Grupo Industrial 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 Industrial will offset losses from the drop in Grupo Industrial'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 Industrial vs. Cydsa SAB de | Grupo Industrial vs. Promotora y Operadora | Grupo Industrial vs. Grupo KUO SAB | Grupo Industrial vs. Organizacin Cultiba 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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