Correlation Between Wal Mart and Genomma Lab
Can any of the company-specific risk be diversified away by investing in both Wal Mart and Genomma Lab 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 Wal Mart and Genomma Lab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wal Mart de Mxico and Genomma Lab Internacional, you can compare the effects of market volatilities on Wal Mart and Genomma Lab 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 Wal Mart with a short position of Genomma Lab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wal Mart and Genomma Lab.
Diversification Opportunities for Wal Mart and Genomma Lab
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wal and Genomma is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Wal Mart de Mxico and Genomma Lab Internacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genomma Lab Internacional and Wal Mart 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 Wal Mart de Mxico are associated (or correlated) with Genomma Lab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genomma Lab Internacional has no effect on the direction of Wal Mart i.e., Wal Mart and Genomma Lab go up and down completely randomly.
Pair Corralation between Wal Mart and Genomma Lab
Assuming the 90 days trading horizon Wal Mart de Mxico is expected to under-perform the Genomma Lab. But the stock apears to be less risky and, when comparing its historical volatility, Wal Mart de Mxico is 1.4 times less risky than Genomma Lab. The stock trades about -0.11 of its potential returns per unit of risk. The Genomma Lab Internacional is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,680 in Genomma Lab Internacional on September 3, 2024 and sell it today you would earn a total of 37.00 from holding Genomma Lab Internacional or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wal Mart de Mxico vs. Genomma Lab Internacional
Performance |
| Timeline |
| Wal Mart de |
| Genomma Lab Internacional |
Wal Mart and Genomma Lab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wal Mart and Genomma Lab
The main advantage of trading using opposite Wal Mart and Genomma Lab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wal Mart position performs unexpectedly, Genomma Lab 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 Genomma Lab will offset losses from the drop in Genomma Lab's long position.| Wal Mart vs. Alsea SAB de | Wal Mart vs. Grupo Bimbo SAB | Wal Mart vs. Fomento Econmico Mexicano | Wal Mart vs. Grupo Financiero Banorte |
| Genomma Lab vs. Gruma SAB de | Genomma Lab vs. Alfa SAB de | Genomma Lab vs. Kimberly Clark de Mxico | Genomma Lab vs. Grupo Mxico SAB |
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 Stocks Directory module to find actively traded stocks across global markets.
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