Correlation Between Grupo Sports and IPC MEXICO
Can any of the company-specific risk be diversified away by investing in both Grupo Sports and IPC MEXICO 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 Grupo Sports and IPC MEXICO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Sports World and IPC MEXICO, you can compare the effects of market volatilities on Grupo Sports and IPC MEXICO 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 Sports with a short position of IPC MEXICO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and IPC MEXICO.
Diversification Opportunities for Grupo Sports and IPC MEXICO
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and IPC is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World and IPC MEXICO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPC MEXICO and Grupo Sports 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 Sports World are associated (or correlated) with IPC MEXICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPC MEXICO has no effect on the direction of Grupo Sports i.e., Grupo Sports and IPC MEXICO go up and down completely randomly.
Pair Corralation between Grupo Sports and IPC MEXICO
Assuming the 90 days trading horizon Grupo Sports World is expected to generate 3.32 times more return on investment than IPC MEXICO. However, Grupo Sports is 3.32 times more volatile than IPC MEXICO. It trades about 0.26 of its potential returns per unit of risk. IPC MEXICO is currently generating about -0.12 per unit of risk. If you would invest 572.00 in Grupo Sports World on August 28, 2024 and sell it today you would earn a total of 68.00 from holding Grupo Sports World or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Grupo Sports World vs. IPC MEXICO
Performance |
| Timeline |
Grupo Sports and IPC MEXICO Volatility Contrast
Predicted Return Density |
| Returns |
Grupo Sports World
Pair trading matchups for Grupo Sports
IPC MEXICO
Pair trading matchups for IPC MEXICO
Pair Trading with Grupo Sports and IPC MEXICO
The main advantage of trading using opposite Grupo Sports and IPC MEXICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports position performs unexpectedly, IPC MEXICO 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 IPC MEXICO will offset losses from the drop in IPC MEXICO's long position.| Grupo Sports vs. New Oriental Education | Grupo Sports vs. Ameriprise Financial | Grupo Sports vs. GMxico Transportes SAB | Grupo Sports vs. First Republic Bank |
| IPC MEXICO vs. Grupo Carso SAB | IPC MEXICO vs. McEwen Mining | IPC MEXICO vs. Cognizant Technology Solutions | IPC MEXICO vs. Taiwan Semiconductor Manufacturing |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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