Correlation Between IPC MEXICO and Grupo Rotoplas
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO and Grupo Rotoplas 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 IPC MEXICO and Grupo Rotoplas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPC MEXICO and Grupo Rotoplas SAB, you can compare the effects of market volatilities on IPC MEXICO and Grupo Rotoplas 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 IPC MEXICO with a short position of Grupo Rotoplas. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and Grupo Rotoplas.
Diversification Opportunities for IPC MEXICO and Grupo Rotoplas
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IPC and Grupo is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and Grupo Rotoplas SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Rotoplas SAB and IPC MEXICO 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 IPC MEXICO are associated (or correlated) with Grupo Rotoplas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Rotoplas SAB has no effect on the direction of IPC MEXICO i.e., IPC MEXICO and Grupo Rotoplas go up and down completely randomly.
Pair Corralation between IPC MEXICO and Grupo Rotoplas
Assuming the 90 days trading horizon IPC MEXICO is expected to generate 0.38 times more return on investment than Grupo Rotoplas. However, IPC MEXICO is 2.66 times less risky than Grupo Rotoplas. It trades about -0.03 of its potential returns per unit of risk. Grupo Rotoplas SAB is currently generating about -0.04 per unit of risk. If you would invest 5,435,652 in IPC MEXICO on September 3, 2024 and sell it today you would lose (392,398) from holding IPC MEXICO or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.85% |
| Values | Daily Returns |
IPC MEXICO vs. Grupo Rotoplas SAB
Performance |
| Timeline |
IPC MEXICO and Grupo Rotoplas Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
Grupo Rotoplas SAB
Pair trading matchups for Grupo Rotoplas
Pair Trading with IPC MEXICO and Grupo Rotoplas
The main advantage of trading using opposite IPC MEXICO and Grupo Rotoplas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO position performs unexpectedly, Grupo Rotoplas 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 Rotoplas will offset losses from the drop in Grupo Rotoplas' long position.| IPC MEXICO vs. United Airlines Holdings | IPC MEXICO vs. DXC Technology | IPC MEXICO vs. Grupo Sports World | IPC MEXICO vs. Applied Materials |
| Grupo Rotoplas vs. Grupo Comercial Chedraui | Grupo Rotoplas vs. Grupo Herdez SAB | Grupo Rotoplas vs. Nemak S A | Grupo Rotoplas vs. Controladora Vuela Compaa |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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