Correlation Between Kimberly Clark and Grupo Aeroportuario

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Can any of the company-specific risk be diversified away by investing in both Kimberly Clark and Grupo Aeroportuario 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 Kimberly Clark and Grupo Aeroportuario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimberly Clark de Mxico and Grupo Aeroportuario del, you can compare the effects of market volatilities on Kimberly Clark and Grupo Aeroportuario 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 Kimberly Clark with a short position of Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimberly Clark and Grupo Aeroportuario.

Diversification Opportunities for Kimberly Clark and Grupo Aeroportuario

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Kimberly and Grupo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kimberly Clark de Mxico and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and Kimberly Clark 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 Kimberly Clark de Mxico are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of Kimberly Clark i.e., Kimberly Clark and Grupo Aeroportuario go up and down completely randomly.

Pair Corralation between Kimberly Clark and Grupo Aeroportuario

Assuming the 90 days trading horizon Kimberly Clark de Mxico is expected to generate 1.06 times more return on investment than Grupo Aeroportuario. However, Kimberly Clark is 1.06 times more volatile than Grupo Aeroportuario del. It trades about -0.12 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about -0.18 per unit of risk. If you would invest  2,847  in Kimberly Clark de Mxico on August 28, 2024 and sell it today you would lose (77.00) from holding Kimberly Clark de Mxico or give up 2.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kimberly Clark de Mxico  vs.  Grupo Aeroportuario del

 Performance 
       Timeline  
Kimberly Clark de 

Risk-Adjusted Performance

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Over the last 90 days Kimberly Clark de Mxico has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Grupo Aeroportuario del 

Risk-Adjusted Performance

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Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Aeroportuario del are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Grupo Aeroportuario is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Kimberly Clark and Grupo Aeroportuario Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kimberly Clark and Grupo Aeroportuario

The main advantage of trading using opposite Kimberly Clark and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimberly Clark position performs unexpectedly, Grupo Aeroportuario 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 Aeroportuario will offset losses from the drop in Grupo Aeroportuario's long position.
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The idea behind Kimberly Clark de Mxico and Grupo Aeroportuario del pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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