Correlation Between Grupo Bimbo and NightFood Holdings
Can any of the company-specific risk be diversified away by investing in both Grupo Bimbo and NightFood Holdings 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 Bimbo and NightFood Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Bimbo SAB and NightFood Holdings, you can compare the effects of market volatilities on Grupo Bimbo and NightFood Holdings 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 Bimbo with a short position of NightFood Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Bimbo and NightFood Holdings.
Diversification Opportunities for Grupo Bimbo and NightFood Holdings
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Grupo and NightFood is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and NightFood Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NightFood Holdings and Grupo Bimbo 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 Bimbo SAB are associated (or correlated) with NightFood Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NightFood Holdings has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and NightFood Holdings go up and down completely randomly.
Pair Corralation between Grupo Bimbo and NightFood Holdings
Assuming the 90 days horizon Grupo Bimbo SAB is expected to generate 0.18 times more return on investment than NightFood Holdings. However, Grupo Bimbo SAB is 5.46 times less risky than NightFood Holdings. It trades about -0.06 of its potential returns per unit of risk. NightFood Holdings is currently generating about -0.03 per unit of risk. If you would invest 1,162 in Grupo Bimbo SAB on December 4, 2024 and sell it today you would lose (92.00) from holding Grupo Bimbo SAB or give up 7.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Grupo Bimbo SAB vs. NightFood Holdings
Performance |
Timeline |
Grupo Bimbo SAB |
NightFood Holdings |
Grupo Bimbo and NightFood Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Bimbo and NightFood Holdings
The main advantage of trading using opposite Grupo Bimbo and NightFood Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Bimbo position performs unexpectedly, NightFood Holdings 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 NightFood Holdings will offset losses from the drop in NightFood Holdings' long position.Grupo Bimbo vs. Treehouse Foods | Grupo Bimbo vs. Lancaster Colony | Grupo Bimbo vs. Utz Brands | Grupo Bimbo vs. Lamb Weston Holdings |
NightFood Holdings vs. Premier Foods Plc | NightFood Holdings vs. Torque Lifestyle Brands | NightFood Holdings vs. Naturally Splendid Enterprises | NightFood Holdings vs. Aryzta AG PK |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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