Correlation Between Grupo Posadas and Verizon Communications
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By analyzing existing cross correlation between Grupo Posadas SAB and Verizon Communications, you can compare the effects of market volatilities on Grupo Posadas and Verizon Communications 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 Grupo Posadas with a short position of Verizon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Posadas and Verizon Communications.
Diversification Opportunities for Grupo Posadas and Verizon Communications
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grupo and Verizon is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Posadas SAB and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications and Grupo Posadas 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 Grupo Posadas SAB are associated (or correlated) with Verizon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of Grupo Posadas i.e., Grupo Posadas and Verizon Communications go up and down completely randomly.
Pair Corralation between Grupo Posadas and Verizon Communications
Assuming the 90 days trading horizon Grupo Posadas SAB is expected to generate 0.83 times more return on investment than Verizon Communications. However, Grupo Posadas SAB is 1.2 times less risky than Verizon Communications. It trades about -0.08 of its potential returns per unit of risk. Verizon Communications is currently generating about -0.11 per unit of risk. If you would invest 2,470 in Grupo Posadas SAB on November 3, 2024 and sell it today you would lose (105.00) from holding Grupo Posadas SAB or give up 4.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Posadas SAB vs. Verizon Communications
Performance |
| Timeline |
| Grupo Posadas SAB |
| Verizon Communications |
Grupo Posadas and Verizon Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Posadas and Verizon Communications
The main advantage of trading using opposite Grupo Posadas and Verizon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Posadas position performs unexpectedly, Verizon Communications 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 Verizon Communications will offset losses from the drop in Verizon Communications' long position.| Grupo Posadas vs. GMxico Transportes SAB | Grupo Posadas vs. Southern Copper | Grupo Posadas vs. Genworth Financial | Grupo Posadas vs. First Republic Bank |
| Verizon Communications vs. KB Home | Verizon Communications vs. McEwen Mining | Verizon Communications vs. Hoteles City Express | Verizon Communications 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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