Correlation Between IPC MEXICO and Grupo Aeroportuario
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO and Grupo Aeroportuario 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 Aeroportuario 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 Aeroportuario del, you can compare the effects of market volatilities on IPC MEXICO and Grupo Aeroportuario 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 Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and Grupo Aeroportuario.
Diversification Opportunities for IPC MEXICO and Grupo Aeroportuario
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between IPC and Grupo is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del 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 Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of IPC MEXICO i.e., IPC MEXICO and Grupo Aeroportuario go up and down completely randomly.
Pair Corralation between IPC MEXICO and Grupo Aeroportuario
Assuming the 90 days trading horizon IPC MEXICO is expected to under-perform the Grupo Aeroportuario. But the index apears to be less risky and, when comparing its historical volatility, IPC MEXICO is 2.81 times less risky than Grupo Aeroportuario. The index trades about 0.0 of its potential returns per unit of risk. The Grupo Aeroportuario del is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 14,604 in Grupo Aeroportuario del on August 28, 2024 and sell it today you would earn a total of 2,234 from holding Grupo Aeroportuario del or generate 15.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.94% |
| Values | Daily Returns |
IPC MEXICO vs. Grupo Aeroportuario del
Performance |
| Timeline |
IPC MEXICO and Grupo Aeroportuario Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
Grupo Aeroportuario del
Pair trading matchups for Grupo Aeroportuario
Pair Trading with IPC MEXICO and Grupo Aeroportuario
The main advantage of trading using opposite IPC MEXICO and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO position performs unexpectedly, Grupo Aeroportuario 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 Aeroportuario will offset losses from the drop in Grupo Aeroportuario'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 Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Promotora y Operadora | Grupo Aeroportuario vs. Gruma SAB de |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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