Correlation Between Grupo Financiero and ALPEK SAB

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

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

Diversification Opportunities for Grupo Financiero and ALPEK SAB

0.16

Correlation Coefficient

Grupo Financiero  ALPEK SAB

Average diversification

The 3 months correlation between Grupo and ALPEK is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Inbursa and ALPEK SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALPEK SAB de and Grupo Financiero 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 Financiero Inbursa are associated (or correlated) with ALPEK SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALPEK SAB de has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and ALPEK SAB go up and down completely randomly.

Pair Corralation between Grupo Financiero and ALPEK SAB

Assuming the 90 days trading horizon Grupo Financiero Inbursa is expected to under-perform the ALPEK SAB. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Financiero Inbursa is 1.78 times less risky than ALPEK SAB. The stock trades about -0.02 of its potential returns per unit of risk. The ALPEK SAB de is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,357  in ALPEK SAB de on December 2, 2024 and sell it today you would lose (39.00) from holding ALPEK SAB de or give up 2.87% of portfolio value over 90 days.

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

Grupo Financiero Inbursa  vs.  ALPEK SAB de

Grupo Financiero Inbursa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Financiero Inbursa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Grupo Financiero is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

ALPEK SAB de

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALPEK SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ALPEK SAB is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grupo Financiero and ALPEK SAB

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

The idea behind Grupo Financiero Inbursa and ALPEK SAB de 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.