Correlation Between Grupo Mxico and China Oilfield
Can any of the company-specific risk be diversified away by investing in both Grupo Mxico and China Oilfield 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 Mxico and China Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Mxico SAB and China Oilfield Services, you can compare the effects of market volatilities on Grupo Mxico and China Oilfield 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 Mxico with a short position of China Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Mxico and China Oilfield.
Diversification Opportunities for Grupo Mxico and China Oilfield
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and China is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Mxico SAB and China Oilfield Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Oilfield Services and Grupo Mxico 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 Mxico SAB are associated (or correlated) with China Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Oilfield Services has no effect on the direction of Grupo Mxico i.e., Grupo Mxico and China Oilfield go up and down completely randomly.
Pair Corralation between Grupo Mxico and China Oilfield
Assuming the 90 days horizon Grupo Mxico SAB is expected to generate 1.64 times more return on investment than China Oilfield. However, Grupo Mxico is 1.64 times more volatile than China Oilfield Services. It trades about 0.1 of its potential returns per unit of risk. China Oilfield Services is currently generating about 0.03 per unit of risk. If you would invest 364.00 in Grupo Mxico SAB on September 25, 2024 and sell it today you would earn a total of 105.00 from holding Grupo Mxico SAB or generate 28.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Grupo Mxico SAB vs. China Oilfield Services
Performance |
Timeline |
Grupo Mxico SAB |
China Oilfield Services |
Grupo Mxico and China Oilfield Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Mxico and China Oilfield
The main advantage of trading using opposite Grupo Mxico and China Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Mxico position performs unexpectedly, China Oilfield 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 China Oilfield will offset losses from the drop in China Oilfield's long position.Grupo Mxico vs. Methode Electronics | Grupo Mxico vs. STMicroelectronics NV | Grupo Mxico vs. UET United Electronic | Grupo Mxico vs. SUN ART RETAIL |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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