Correlation Between Fomento Economico and Beyond Meat

Can any of the company-specific risk be diversified away by investing in both Fomento Economico and Beyond Meat 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 Fomento Economico and Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fomento Economico Mexicano and Beyond Meat, you can compare the effects of market volatilities on Fomento Economico and Beyond Meat 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 Fomento Economico with a short position of Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and Beyond Meat.

Diversification Opportunities for Fomento Economico and Beyond Meat

0.29

Correlation Coefficient

Fomento Economico  Beyond Meat

Modest diversification

The 3 months correlation between Fomento and Beyond is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat and Fomento Economico 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 Fomento Economico Mexicano are associated (or correlated) with Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Fomento Economico i.e., Fomento Economico and Beyond Meat go up and down completely randomly.

Pair Corralation between Fomento Economico and Beyond Meat

Considering the 90-day investment horizon Fomento Economico Mexicano is expected to generate 0.45 times more return on investment than Beyond Meat. However, Fomento Economico Mexicano is 2.24 times less risky than Beyond Meat. It trades about 0.02 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.11 per unit of risk. If you would invest  8,841  in Fomento Economico Mexicano on November 28, 2024 and sell it today you would earn a total of  122.00  from holding Fomento Economico Mexicano or generate 1.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Fomento Economico Mexicano  vs.  Beyond Meat

Fomento Economico

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fomento Economico Mexicano are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Fomento Economico is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Beyond Meat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beyond Meat 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 basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Fomento Economico and Beyond Meat

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

The idea behind Fomento Economico Mexicano and Beyond Meat 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.