Correlation Between Grupo Sports and Exxon
Can any of the company-specific risk be diversified away by investing in both Grupo Sports and Exxon 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 Exxon 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 Exxon Mobil, you can compare the effects of market volatilities on Grupo Sports and Exxon 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 Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and Exxon.
Diversification Opportunities for Grupo Sports and Exxon
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grupo and Exxon is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World and Exxon Mobil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil has no effect on the direction of Grupo Sports i.e., Grupo Sports and Exxon go up and down completely randomly.
Pair Corralation between Grupo Sports and Exxon
Assuming the 90 days trading horizon Grupo Sports World is expected to generate 1.16 times more return on investment than Exxon. However, Grupo Sports is 1.16 times more volatile than Exxon Mobil. It trades about 0.15 of its potential returns per unit of risk. Exxon Mobil is currently generating about 0.1 per unit of risk. If you would invest 440.00 in Grupo Sports World on September 3, 2024 and sell it today you would earn a total of 200.00 from holding Grupo Sports World or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Sports World vs. Exxon Mobil
Performance |
| Timeline |
| Grupo Sports World |
| Exxon Mobil |
Grupo Sports and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Sports and Exxon
The main advantage of trading using opposite Grupo Sports and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.| Grupo Sports vs. Axtel SAB de | Grupo Sports vs. Fomento Econmico Mexicano | Grupo Sports vs. Lloyds Banking Group | Grupo Sports vs. Apple Inc |
| Exxon vs. GMxico Transportes SAB | Exxon vs. Deutsche Bank Aktiengesellschaft | Exxon vs. Grupo Hotelero Santa | Exxon vs. Hoteles City Express |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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