Correlation Between Nemak S and Gentera SAB

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Can any of the company-specific risk be diversified away by investing in both Nemak S and Gentera SAB 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 Nemak S and Gentera SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nemak S A and Gentera SAB de, you can compare the effects of market volatilities on Nemak S and Gentera SAB 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 Nemak S with a short position of Gentera SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nemak S and Gentera SAB.

Diversification Opportunities for Nemak S and Gentera SAB

-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between Nemak and Gentera is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nemak S A and Gentera SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentera SAB de and Nemak S 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 Nemak S A are associated (or correlated) with Gentera SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentera SAB de has no effect on the direction of Nemak S i.e., Nemak S and Gentera SAB go up and down completely randomly.

Pair Corralation between Nemak S and Gentera SAB

Assuming the 90 days trading horizon Nemak S A is expected to under-perform the Gentera SAB. In addition to that, Nemak S is 1.14 times more volatile than Gentera SAB de. It trades about -0.11 of its total potential returns per unit of risk. Gentera SAB de is currently generating about 0.06 per unit of volatility. If you would invest  1,909  in Gentera SAB de on September 2, 2024 and sell it today you would earn a total of  672.00  from holding Gentera SAB de or generate 35.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Nemak S A  vs.  Gentera SAB de

 Performance 
       Timeline  
Nemak S A 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nemak S A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Gentera SAB de 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Gentera SAB de are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gentera SAB sustained solid returns over the last few months and may actually be approaching a breakup point.

Nemak S and Gentera SAB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nemak S and Gentera SAB

The main advantage of trading using opposite Nemak S and Gentera SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nemak S position performs unexpectedly, Gentera SAB 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 Gentera SAB will offset losses from the drop in Gentera SAB's long position.
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The idea behind Nemak S A and Gentera SAB de 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.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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