Correlation Between Grupo Hotelero and GMxico Transportes
Can any of the company-specific risk be diversified away by investing in both Grupo Hotelero and GMxico Transportes 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 Hotelero and GMxico Transportes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Hotelero Santa and GMxico Transportes SAB, you can compare the effects of market volatilities on Grupo Hotelero and GMxico Transportes 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 Hotelero with a short position of GMxico Transportes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Hotelero and GMxico Transportes.
Diversification Opportunities for Grupo Hotelero and GMxico Transportes
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and GMxico is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Hotelero Santa and GMxico Transportes SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMxico Transportes SAB and Grupo Hotelero 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 Hotelero Santa are associated (or correlated) with GMxico Transportes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMxico Transportes SAB has no effect on the direction of Grupo Hotelero i.e., Grupo Hotelero and GMxico Transportes go up and down completely randomly.
Pair Corralation between Grupo Hotelero and GMxico Transportes
Assuming the 90 days trading horizon Grupo Hotelero Santa is expected to generate 1.51 times more return on investment than GMxico Transportes. However, Grupo Hotelero is 1.51 times more volatile than GMxico Transportes SAB. It trades about 0.01 of its potential returns per unit of risk. GMxico Transportes SAB is currently generating about -0.08 per unit of risk. If you would invest 390.00 in Grupo Hotelero Santa on November 1, 2024 and sell it today you would earn a total of 0.00 from holding Grupo Hotelero Santa or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Hotelero Santa vs. GMxico Transportes SAB
Performance |
| Timeline |
| Grupo Hotelero Santa |
| GMxico Transportes SAB |
Grupo Hotelero and GMxico Transportes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Hotelero and GMxico Transportes
The main advantage of trading using opposite Grupo Hotelero and GMxico Transportes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Hotelero position performs unexpectedly, GMxico Transportes 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 GMxico Transportes will offset losses from the drop in GMxico Transportes' long position.| Grupo Hotelero vs. Cognizant Technology Solutions | Grupo Hotelero vs. Samsung Electronics Co | Grupo Hotelero vs. Martin Marietta Materials | Grupo Hotelero vs. Lloyds Banking Group |
| GMxico Transportes vs. Grupo Hotelero Santa | GMxico Transportes vs. Grupo Carso SAB | GMxico Transportes vs. First Majestic Silver | GMxico Transportes vs. Ameriprise Financial |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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