Correlation Between Grupo Hotelero and Nemak S
Can any of the company-specific risk be diversified away by investing in both Grupo Hotelero and Nemak S 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 Nemak S 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 Nemak S A, you can compare the effects of market volatilities on Grupo Hotelero and Nemak S 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 Nemak S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Hotelero and Nemak S.
Diversification Opportunities for Grupo Hotelero and Nemak S
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Nemak is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Hotelero Santa and Nemak S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nemak S A 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 Nemak S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nemak S A has no effect on the direction of Grupo Hotelero i.e., Grupo Hotelero and Nemak S go up and down completely randomly.
Pair Corralation between Grupo Hotelero and Nemak S
Assuming the 90 days trading horizon Grupo Hotelero Santa is expected to generate 1.07 times more return on investment than Nemak S. However, Grupo Hotelero is 1.07 times more volatile than Nemak S A. It trades about 0.07 of its potential returns per unit of risk. Nemak S A is currently generating about -0.08 per unit of risk. If you would invest 364.00 in Grupo Hotelero Santa on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Grupo Hotelero Santa or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Hotelero Santa vs. Nemak S A
Performance |
| Timeline |
| Grupo Hotelero Santa |
| Nemak S A |
Grupo Hotelero and Nemak S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Hotelero and Nemak S
The main advantage of trading using opposite Grupo Hotelero and Nemak S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Hotelero position performs unexpectedly, Nemak S 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 Nemak S will offset losses from the drop in Nemak S's long position.| Grupo Hotelero vs. Axtel SAB de | Grupo Hotelero vs. Fomento Econmico Mexicano | Grupo Hotelero vs. Lloyds Banking Group | Grupo Hotelero vs. Apple Inc |
| Nemak S vs. DXC Technology | Nemak S vs. Cognizant Technology Solutions | Nemak S vs. Martin Marietta Materials | Nemak S vs. KB Home |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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