Correlation Between Swire Pacific and Grupo Bimbo
Can any of the company-specific risk be diversified away by investing in both Swire Pacific 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 Swire Pacific and Grupo Bimbo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swire Pacific Ltd and Grupo Bimbo SAB, you can compare the effects of market volatilities on Swire Pacific 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 Swire Pacific with a short position of Grupo Bimbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swire Pacific and Grupo Bimbo.
Diversification Opportunities for Swire Pacific and Grupo Bimbo
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swire and Grupo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Swire Pacific Ltd 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 Swire Pacific 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 Swire Pacific Ltd 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 Swire Pacific i.e., Swire Pacific and Grupo Bimbo go up and down completely randomly.
Pair Corralation between Swire Pacific and Grupo Bimbo
Assuming the 90 days horizon Swire Pacific Ltd is expected to generate 2.36 times more return on investment than Grupo Bimbo. However, Swire Pacific is 2.36 times more volatile than Grupo Bimbo SAB. It trades about 0.06 of its potential returns per unit of risk. Grupo Bimbo SAB is currently generating about -0.01 per unit of risk. If you would invest 480.00 in Swire Pacific Ltd on September 5, 2024 and sell it today you would earn a total of 188.00 from holding Swire Pacific Ltd or generate 39.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.32% |
| Values | Daily Returns |
Swire Pacific Ltd vs. Grupo Bimbo SAB
Performance |
| Timeline |
| Swire Pacific |
| Grupo Bimbo SAB |
Swire Pacific and Grupo Bimbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swire Pacific and Grupo Bimbo
The main advantage of trading using opposite Swire Pacific and Grupo Bimbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swire Pacific 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.| Swire Pacific vs. CITIC Limited | Swire Pacific vs. Fosun International | Swire Pacific vs. Cibl Inc | Swire Pacific vs. Jardine Matheson Holdings |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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