Correlation Between Grupo Sports and Value Grupo

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Can any of the company-specific risk be diversified away by investing in both Grupo Sports and Value Grupo 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 Value Grupo 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 Value Grupo Financiero, you can compare the effects of market volatilities on Grupo Sports and Value Grupo 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 Value Grupo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and Value Grupo.

Diversification Opportunities for Grupo Sports and Value Grupo

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Grupo and Value is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World and Value Grupo Financiero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Grupo Financiero 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 Value Grupo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Grupo Financiero has no effect on the direction of Grupo Sports i.e., Grupo Sports and Value Grupo go up and down completely randomly.

Pair Corralation between Grupo Sports and Value Grupo

Assuming the 90 days trading horizon Grupo Sports World is expected to generate 0.58 times more return on investment than Value Grupo. However, Grupo Sports World is 1.74 times less risky than Value Grupo. It trades about 0.08 of its potential returns per unit of risk. Value Grupo Financiero is currently generating about 0.01 per unit of risk. If you would invest  292.00  in Grupo Sports World on August 27, 2024 and sell it today you would earn a total of  348.00  from holding Grupo Sports World or generate 119.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Grupo Sports World  vs.  Value Grupo Financiero

 Performance 
       Timeline  
Grupo Sports World 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Sports World are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Grupo Sports sustained solid returns over the last few months and may actually be approaching a breakup point.
Value Grupo Financiero 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Value Grupo Financiero 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 technical and fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Grupo Sports and Value Grupo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grupo Sports and Value Grupo

The main advantage of trading using opposite Grupo Sports and Value Grupo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports position performs unexpectedly, Value Grupo 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 Value Grupo will offset losses from the drop in Value Grupo's long position.
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The idea behind Grupo Sports World and Value Grupo Financiero 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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