Correlation Between IPC MEXICO and Grupo Hotelero
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO and Grupo Hotelero 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 Hotelero 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 Hotelero Santa, you can compare the effects of market volatilities on IPC MEXICO and Grupo Hotelero 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 Hotelero. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and Grupo Hotelero.
Diversification Opportunities for IPC MEXICO and Grupo Hotelero
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPC and Grupo is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and Grupo Hotelero Santa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Hotelero Santa 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 Hotelero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Hotelero Santa has no effect on the direction of IPC MEXICO i.e., IPC MEXICO and Grupo Hotelero go up and down completely randomly.
Pair Corralation between IPC MEXICO and Grupo Hotelero
Assuming the 90 days trading horizon IPC MEXICO is expected to under-perform the Grupo Hotelero. But the index apears to be less risky and, when comparing its historical volatility, IPC MEXICO is 2.83 times less risky than Grupo Hotelero. The index trades about -0.16 of its potential returns per unit of risk. The Grupo Hotelero Santa is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 370.00 in Grupo Hotelero Santa on August 28, 2024 and sell it today you would earn a total of 25.00 from holding Grupo Hotelero Santa or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
IPC MEXICO vs. Grupo Hotelero Santa
Performance |
| Timeline |
IPC MEXICO and Grupo Hotelero Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
Grupo Hotelero Santa
Pair trading matchups for Grupo Hotelero
Pair Trading with IPC MEXICO and Grupo Hotelero
The main advantage of trading using opposite IPC MEXICO and Grupo Hotelero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO position performs unexpectedly, Grupo Hotelero 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 Hotelero will offset losses from the drop in Grupo Hotelero's long position.| IPC MEXICO vs. Grupo Carso SAB | IPC MEXICO vs. McEwen Mining | IPC MEXICO vs. Cognizant Technology Solutions | IPC MEXICO vs. Taiwan Semiconductor Manufacturing |
| Grupo Hotelero vs. Prudential Financial | Grupo Hotelero vs. Ameriprise Financial | Grupo Hotelero vs. GMxico Transportes SAB | Grupo Hotelero vs. Grupo Sports World |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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