Correlation Between Blue Star and Grupo Bimbo

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

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

Diversification Opportunities for Blue Star and Grupo Bimbo

0.81

Correlation Coefficient

Blue Star  Grupo Bimbo

Very poor diversification

The 3 months correlation between Blue and Grupo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Foods and Grupo Bimbo SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Bimbo SAB and Blue Star 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 Blue Star Foods are associated (or correlated) with Grupo Bimbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Bimbo SAB has no effect on the direction of Blue Star i.e., Blue Star and Grupo Bimbo go up and down completely randomly.

Pair Corralation between Blue Star and Grupo Bimbo

Given the investment horizon of 90 days Blue Star Foods is expected to under-perform the Grupo Bimbo. In addition to that, Blue Star is 6.12 times more volatile than Grupo Bimbo SAB. It trades about -0.07 of its total potential returns per unit of risk. Grupo Bimbo SAB is currently generating about -0.22 per unit of volatility. If you would invest  300.00  in Grupo Bimbo SAB on October 3, 2024 and sell it today you would lose (41.00) from holding Grupo Bimbo SAB or give up 13.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

Blue Star Foods  vs.  Grupo Bimbo SAB

Blue Star Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Star Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Grupo Bimbo SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Bimbo SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Blue Star and Grupo Bimbo

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

The idea behind Blue Star Foods and Grupo Bimbo 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.