Correlation Between Premier Foods and Grupo Bimbo
Can any of the company-specific risk be diversified away by investing in both Premier Foods and Grupo Bimbo 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 Premier Foods and Grupo Bimbo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Foods Plc and Grupo Bimbo SAB, you can compare the effects of market volatilities on Premier Foods and Grupo Bimbo 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 Premier Foods with a short position of Grupo Bimbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and Grupo Bimbo.
Diversification Opportunities for Premier Foods and Grupo Bimbo
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Premier and Grupo is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods Plc and Grupo Bimbo SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Bimbo SAB and Premier Foods 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 Premier Foods Plc are associated (or correlated) with Grupo Bimbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Bimbo SAB has no effect on the direction of Premier Foods i.e., Premier Foods and Grupo Bimbo go up and down completely randomly.
Pair Corralation between Premier Foods and Grupo Bimbo
If you would invest 208.00 in Premier Foods Plc on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Premier Foods Plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Premier Foods Plc vs. Grupo Bimbo SAB
Performance |
| Timeline |
| Premier Foods Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Grupo Bimbo SAB |
Premier Foods and Grupo Bimbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and Grupo Bimbo
The main advantage of trading using opposite Premier Foods and Grupo Bimbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods position performs unexpectedly, Grupo Bimbo 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 Bimbo will offset losses from the drop in Grupo Bimbo's long position.| Premier Foods vs. Torque Lifestyle Brands | Premier Foods vs. Naturally Splendid Enterprises | Premier Foods vs. Aryzta AG PK | Premier Foods vs. Premier Foods Plc |
| Grupo Bimbo vs. Treehouse Foods | Grupo Bimbo vs. Lancaster Colony | Grupo Bimbo vs. Utz Brands | Grupo Bimbo vs. Lamb Weston Holdings |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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