Correlation Between Grupo Hotelero and 3M
Can any of the company-specific risk be diversified away by investing in both Grupo Hotelero and 3M 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 3M 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 3M Company, you can compare the effects of market volatilities on Grupo Hotelero and 3M 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 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Hotelero and 3M.
Diversification Opportunities for Grupo Hotelero and 3M
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grupo and 3M is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Hotelero Santa and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company 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 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of Grupo Hotelero i.e., Grupo Hotelero and 3M go up and down completely randomly.
Pair Corralation between Grupo Hotelero and 3M
If you would invest 376.00 in Grupo Hotelero Santa on September 25, 2024 and sell it today you would earn a total of 13.00 from holding Grupo Hotelero Santa or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.2% |
| Values | Daily Returns |
Grupo Hotelero Santa vs. 3M Company
Performance |
| Timeline |
| Grupo Hotelero Santa |
| 3M Company |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Grupo Hotelero and 3M Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Hotelero and 3M
The main advantage of trading using opposite Grupo Hotelero and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Hotelero position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.| Grupo Hotelero vs. First Republic Bank | Grupo Hotelero vs. FIBRA Storage | Grupo Hotelero vs. Verizon Communications | Grupo Hotelero vs. Applied Materials |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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