Correlation Between IPC MEXICO and Grupo Nacional
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO and Grupo Nacional 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 Nacional 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 Nacional Provincial, you can compare the effects of market volatilities on IPC MEXICO and Grupo Nacional 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 Nacional. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and Grupo Nacional.
Diversification Opportunities for IPC MEXICO and Grupo Nacional
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IPC and Grupo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and Grupo Nacional Provincial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Nacional Provincial 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 Nacional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Nacional Provincial has no effect on the direction of IPC MEXICO i.e., IPC MEXICO and Grupo Nacional go up and down completely randomly.
Pair Corralation between IPC MEXICO and Grupo Nacional
Assuming the 90 days trading horizon IPC MEXICO is expected to generate 0.16 times more return on investment than Grupo Nacional. However, IPC MEXICO is 6.18 times less risky than Grupo Nacional. It trades about -0.14 of its potential returns per unit of risk. Grupo Nacional Provincial is currently generating about -0.23 per unit of risk. If you would invest 5,083,151 in IPC MEXICO on September 3, 2024 and sell it today you would lose (112,167) from holding IPC MEXICO or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
IPC MEXICO vs. Grupo Nacional Provincial
Performance |
| Timeline |
IPC MEXICO and Grupo Nacional Volatility Contrast
Predicted Return Density |
| Returns |
Grupo Nacional Provincial
Pair trading matchups for Grupo Nacional
Pair Trading with IPC MEXICO and Grupo Nacional
The main advantage of trading using opposite IPC MEXICO and Grupo Nacional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO position performs unexpectedly, Grupo Nacional 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 Nacional will offset losses from the drop in Grupo Nacional's long position.The idea behind IPC MEXICO and Grupo Nacional Provincial 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.| Grupo Nacional vs. Samsung Electronics Co | Grupo Nacional vs. Taiwan Semiconductor Manufacturing | Grupo Nacional vs. JPMorgan Chase Co | Grupo Nacional vs. Bank of America |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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