Correlation Between Grupo Aeromxico and Grupo KUO

Can any of the company-specific risk be diversified away by investing in both Grupo Aeromxico and Grupo KUO 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 Aeromxico and Grupo KUO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grupo Aeromxico SAB and Grupo KUO SAB, you can compare the effects of market volatilities on Grupo Aeromxico and Grupo KUO 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 Aeromxico with a short position of Grupo KUO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeromxico and Grupo KUO.

Diversification Opportunities for Grupo Aeromxico and Grupo KUO

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Correlation Coefficient

Grupo Aeromxico  Grupo KUO

Pay attention - limited upside

The 3 months correlation between Grupo and Grupo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeromxico SAB and Grupo KUO SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo KUO SAB and Grupo Aeromxico 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 Aeromxico SAB are associated (or correlated) with Grupo KUO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo KUO SAB has no effect on the direction of Grupo Aeromxico i.e., Grupo Aeromxico and Grupo KUO go up and down completely randomly.

Pair Corralation between Grupo Aeromxico and Grupo KUO

If you would invest  4,116  in Grupo KUO SAB on October 6, 2024 and sell it today you would earn a total of  484.00  from holding Grupo KUO SAB or generate 11.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Grupo Aeromxico SAB  vs.  Grupo KUO SAB

Grupo Aeromxico SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Aeromxico SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Grupo Aeromxico is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Grupo KUO SAB

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo KUO SAB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Grupo KUO may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Grupo Aeromxico and Grupo KUO

The main advantage of trading using opposite Grupo Aeromxico and Grupo KUO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeromxico position performs unexpectedly, Grupo KUO 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 KUO will offset losses from the drop in Grupo KUO's long position.

The idea behind Grupo Aeromxico SAB and Grupo KUO SAB 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.