Correlation Between CN DATANG and Grupo Mxico

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

Diversification Opportunities for CN DATANG and Grupo Mxico

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between DT7 and Grupo is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CN DATANG C and Grupo Mxico SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Mxico SAB and CN DATANG 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 CN DATANG C are associated (or correlated) with Grupo Mxico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Mxico SAB has no effect on the direction of CN DATANG i.e., CN DATANG and Grupo Mxico go up and down completely randomly.

Pair Corralation between CN DATANG and Grupo Mxico

Assuming the 90 days trading horizon CN DATANG is expected to generate 2.54 times less return on investment than Grupo Mxico. In addition to that, CN DATANG is 1.02 times more volatile than Grupo Mxico SAB. It trades about 0.05 of its total potential returns per unit of risk. Grupo Mxico SAB is currently generating about 0.12 per unit of volatility. If you would invest  58.00  in Grupo Mxico SAB on October 24, 2024 and sell it today you would earn a total of  420.00  from holding Grupo Mxico SAB or generate 724.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

CN DATANG C  vs.  Grupo Mxico SAB

 Performance 
       Timeline  
CN DATANG C 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in CN DATANG C are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CN DATANG may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Grupo Mxico SAB 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Mxico SAB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Grupo Mxico reported solid returns over the last few months and may actually be approaching a breakup point.

CN DATANG and Grupo Mxico Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CN DATANG and Grupo Mxico

The main advantage of trading using opposite CN DATANG and Grupo Mxico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN DATANG position performs unexpectedly, Grupo Mxico 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 Mxico will offset losses from the drop in Grupo Mxico's long position.
The idea behind CN DATANG C and Grupo Mxico 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

Other Complementary Tools

Global Correlations
Find global opportunities by holding instruments from different markets
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated