Correlation Between Grupo KUO and Grupo Industrial
Can any of the company-specific risk be diversified away by investing in both Grupo KUO and Grupo Industrial 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 KUO and Grupo Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo KUO SAB and Grupo Industrial Saltillo, you can compare the effects of market volatilities on Grupo KUO and Grupo Industrial 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 KUO with a short position of Grupo Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo KUO and Grupo Industrial.
Diversification Opportunities for Grupo KUO and Grupo Industrial
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Grupo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Grupo KUO SAB and Grupo Industrial Saltillo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Industrial Saltillo and Grupo KUO 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 KUO SAB are associated (or correlated) with Grupo Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Industrial Saltillo has no effect on the direction of Grupo KUO i.e., Grupo KUO and Grupo Industrial go up and down completely randomly.
Pair Corralation between Grupo KUO and Grupo Industrial
Assuming the 90 days trading horizon Grupo KUO SAB is expected to generate 0.78 times more return on investment than Grupo Industrial. However, Grupo KUO SAB is 1.27 times less risky than Grupo Industrial. It trades about 0.02 of its potential returns per unit of risk. Grupo Industrial Saltillo is currently generating about -0.06 per unit of risk. If you would invest 3,929 in Grupo KUO SAB on August 31, 2024 and sell it today you would earn a total of 361.00 from holding Grupo KUO SAB or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.52% |
| Values | Daily Returns |
Grupo KUO SAB vs. Grupo Industrial Saltillo
Performance |
| Timeline |
| Grupo KUO SAB |
| Grupo Industrial Saltillo |
Grupo KUO and Grupo Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo KUO and Grupo Industrial
The main advantage of trading using opposite Grupo KUO and Grupo Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo KUO position performs unexpectedly, Grupo Industrial 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 Industrial will offset losses from the drop in Grupo Industrial's long position.| Grupo KUO vs. McEwen Mining | Grupo KUO vs. KB Home | Grupo KUO vs. FibraHotel | Grupo KUO vs. Cognizant Technology Solutions |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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