Correlation Between Bolsa Mexicana and Grupo Gigante

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bolsa Mexicana and Grupo Gigante 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 Bolsa Mexicana and Grupo Gigante into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bolsa Mexicana de and Grupo Gigante S, you can compare the effects of market volatilities on Bolsa Mexicana and Grupo Gigante 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 Bolsa Mexicana with a short position of Grupo Gigante. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bolsa Mexicana and Grupo Gigante.

Diversification Opportunities for Bolsa Mexicana and Grupo Gigante

-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between Bolsa and Grupo is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bolsa Mexicana de and Grupo Gigante S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Gigante S and Bolsa Mexicana 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 Bolsa Mexicana de are associated (or correlated) with Grupo Gigante. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Gigante S has no effect on the direction of Bolsa Mexicana i.e., Bolsa Mexicana and Grupo Gigante go up and down completely randomly.

Pair Corralation between Bolsa Mexicana and Grupo Gigante

Assuming the 90 days trading horizon Bolsa Mexicana de is expected to under-perform the Grupo Gigante. But the stock apears to be less risky and, when comparing its historical volatility, Bolsa Mexicana de is 1.22 times less risky than Grupo Gigante. The stock trades about -0.18 of its potential returns per unit of risk. The Grupo Gigante S is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  2,500  in Grupo Gigante S on October 10, 2024 and sell it today you would earn a total of  300.00  from holding Grupo Gigante S or generate 12.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

Bolsa Mexicana de  vs.  Grupo Gigante S

 Performance 
       Timeline  
Bolsa Mexicana de 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bolsa Mexicana de has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Gigante S 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Gigante S are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Grupo Gigante is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Bolsa Mexicana and Grupo Gigante Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bolsa Mexicana and Grupo Gigante

The main advantage of trading using opposite Bolsa Mexicana and Grupo Gigante positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bolsa Mexicana position performs unexpectedly, Grupo Gigante 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 Gigante will offset losses from the drop in Grupo Gigante's long position.
The idea behind Bolsa Mexicana de and Grupo Gigante S 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.
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Stocks Directory
Find actively traded stocks across global markets
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Money Managers
Screen money managers from public funds and ETFs managed around the world