Correlation Between Grupo Aeroportuario and Bolsa Mexicana

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Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario and Bolsa Mexicana 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 Aeroportuario and Bolsa Mexicana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aeroportuario del and Bolsa Mexicana de, you can compare the effects of market volatilities on Grupo Aeroportuario and Bolsa Mexicana 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 Aeroportuario with a short position of Bolsa Mexicana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and Bolsa Mexicana.

Diversification Opportunities for Grupo Aeroportuario and Bolsa Mexicana

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Grupo and Bolsa is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Aeroportuario del and Bolsa Mexicana de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolsa Mexicana de and Grupo Aeroportuario 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 Aeroportuario del are associated (or correlated) with Bolsa Mexicana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolsa Mexicana de has no effect on the direction of Grupo Aeroportuario i.e., Grupo Aeroportuario and Bolsa Mexicana go up and down completely randomly.

Pair Corralation between Grupo Aeroportuario and Bolsa Mexicana

Assuming the 90 days trading horizon Grupo Aeroportuario del is expected to generate 1.34 times more return on investment than Bolsa Mexicana. However, Grupo Aeroportuario is 1.34 times more volatile than Bolsa Mexicana de. It trades about 0.02 of its potential returns per unit of risk. Bolsa Mexicana de is currently generating about 0.0 per unit of risk. If you would invest  50,151  in Grupo Aeroportuario del on October 12, 2024 and sell it today you would earn a total of  2,864  from holding Grupo Aeroportuario del or generate 5.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Grupo Aeroportuario del  vs.  Bolsa Mexicana de

 Performance 
       Timeline  
Grupo Aeroportuario del 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Grupo Aeroportuario del has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Grupo Aeroportuario is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
Bolsa Mexicana de 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Bolsa Mexicana de are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Bolsa Mexicana is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Grupo Aeroportuario and Bolsa Mexicana Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grupo Aeroportuario and Bolsa Mexicana

The main advantage of trading using opposite Grupo Aeroportuario and Bolsa Mexicana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario position performs unexpectedly, Bolsa Mexicana 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 Bolsa Mexicana will offset losses from the drop in Bolsa Mexicana's long position.
The idea behind Grupo Aeroportuario del and Bolsa Mexicana de 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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