Correlation Between Kimberly Clark and Grupo Elektra

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Can any of the company-specific risk be diversified away by investing in both Kimberly Clark and Grupo Elektra 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 Elektra 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 Elektra SAB, you can compare the effects of market volatilities on Kimberly Clark and Grupo Elektra 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 Elektra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimberly Clark and Grupo Elektra.

Diversification Opportunities for Kimberly Clark and Grupo Elektra

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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 Elektra SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Elektra SAB 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 Elektra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Elektra SAB has no effect on the direction of Kimberly Clark i.e., Kimberly Clark and Grupo Elektra go up and down completely randomly.

Pair Corralation between Kimberly Clark and Grupo Elektra

Assuming the 90 days trading horizon Kimberly Clark de Mxico is expected to under-perform the Grupo Elektra. In addition to that, Kimberly Clark is 1.5 times more volatile than Grupo Elektra SAB. It trades about -0.11 of its total potential returns per unit of risk. Grupo Elektra SAB is currently generating about -0.12 per unit of volatility. If you would invest  109,030  in Grupo Elektra SAB on September 2, 2024 and sell it today you would lose (14,535) from holding Grupo Elektra SAB or give up 13.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.21%
ValuesDaily Returns

Kimberly Clark de Mxico  vs.  Grupo Elektra SAB

 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Grupo Elektra SAB 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Grupo Elektra SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Grupo Elektra is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Kimberly Clark and Grupo Elektra Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kimberly Clark and Grupo Elektra

The main advantage of trading using opposite Kimberly Clark and Grupo Elektra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimberly Clark position performs unexpectedly, Grupo Elektra 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 Elektra will offset losses from the drop in Grupo Elektra's long position.
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The idea behind Kimberly Clark de Mxico and Grupo Elektra SAB 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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