Correlation Between Union Pacific and GMéxico Transportes
Can any of the company-specific risk be diversified away by investing in both Union Pacific and GMéxico Transportes 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 Union Pacific and GMéxico Transportes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Pacific and GMxico Transportes SAB, you can compare the effects of market volatilities on Union Pacific and GMéxico Transportes 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 Union Pacific with a short position of GMéxico Transportes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Pacific and GMéxico Transportes.
Diversification Opportunities for Union Pacific and GMéxico Transportes
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Union and GMéxico is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Union Pacific and GMxico Transportes SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMxico Transportes SAB and Union 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 Union Pacific are associated (or correlated) with GMéxico Transportes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMxico Transportes SAB has no effect on the direction of Union Pacific i.e., Union Pacific and GMéxico Transportes go up and down completely randomly.
Pair Corralation between Union Pacific and GMéxico Transportes
Considering the 90-day investment horizon Union Pacific is expected to generate 8.57 times less return on investment than GMéxico Transportes. But when comparing it to its historical volatility, Union Pacific is 5.35 times less risky than GMéxico Transportes. It trades about 0.12 of its potential returns per unit of risk. GMxico Transportes SAB is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 110.00 in GMxico Transportes SAB on September 4, 2024 and sell it today you would earn a total of 45.00 from holding GMxico Transportes SAB or generate 40.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Pacific vs. GMxico Transportes SAB
Performance |
| Timeline |
| Union Pacific |
| GMxico Transportes SAB |
Union Pacific and GMéxico Transportes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Pacific and GMéxico Transportes
The main advantage of trading using opposite Union Pacific and GMéxico Transportes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Pacific position performs unexpectedly, GMéxico Transportes 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 GMéxico Transportes will offset losses from the drop in GMéxico Transportes' long position.| Union Pacific vs. Norfolk Southern | Union Pacific vs. CSX Corporation | Union Pacific vs. United Parcel Service | Union Pacific vs. Canadian National Railway |
| GMéxico Transportes vs. West Japan Railway | GMéxico Transportes vs. Central Japan Railway | GMéxico Transportes vs. LB Foster | GMéxico Transportes vs. Norfolk Southern |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |