Correlation Between Grupo México and RYMAN HEALTHCAR

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Can any of the company-specific risk be diversified away by investing in both Grupo México and RYMAN HEALTHCAR 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 México and RYMAN HEALTHCAR 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 RYMAN HEALTHCAR, you can compare the effects of market volatilities on Grupo México and RYMAN HEALTHCAR 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 México with a short position of RYMAN HEALTHCAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo México and RYMAN HEALTHCAR.

Diversification Opportunities for Grupo México and RYMAN HEALTHCAR

-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Grupo and RYMAN is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Mxico SAB and RYMAN HEALTHCAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RYMAN HEALTHCAR and Grupo México 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 RYMAN HEALTHCAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RYMAN HEALTHCAR has no effect on the direction of Grupo México i.e., Grupo México and RYMAN HEALTHCAR go up and down completely randomly.

Pair Corralation between Grupo México and RYMAN HEALTHCAR

Assuming the 90 days horizon Grupo Mxico SAB is expected to generate 2.73 times more return on investment than RYMAN HEALTHCAR. However, Grupo México is 2.73 times more volatile than RYMAN HEALTHCAR. It trades about 0.09 of its potential returns per unit of risk. RYMAN HEALTHCAR is currently generating about 0.0 per unit of risk. If you would invest  372.00  in Grupo Mxico SAB on October 8, 2024 and sell it today you would earn a total of  94.00  from holding Grupo Mxico SAB or generate 25.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Grupo Mxico SAB  vs.  RYMAN HEALTHCAR

 Performance 
       Timeline  
Grupo Mxico SAB 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Mxico SAB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Grupo México reported solid returns over the last few months and may actually be approaching a breakup point.
RYMAN HEALTHCAR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days RYMAN HEALTHCAR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, RYMAN HEALTHCAR is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Grupo México and RYMAN HEALTHCAR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grupo México and RYMAN HEALTHCAR

The main advantage of trading using opposite Grupo México and RYMAN HEALTHCAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo México position performs unexpectedly, RYMAN HEALTHCAR 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 RYMAN HEALTHCAR will offset losses from the drop in RYMAN HEALTHCAR's long position.
The idea behind Grupo Mxico SAB and RYMAN HEALTHCAR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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