Correlation Between Grupo Mxico and Vanadium One

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

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

Diversification Opportunities for Grupo Mxico and Vanadium One

-0.46

Correlation Coefficient

Grupo Mxico  Vanadium One

Very good diversification

The 3 months correlation between Grupo and Vanadium is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Mxico SAB and Vanadium One Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanadium One Iron and Grupo Mxico 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 Mxico SAB are associated (or correlated) with Vanadium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanadium One Iron has no effect on the direction of Grupo Mxico i.e., Grupo Mxico and Vanadium One go up and down completely randomly.

Pair Corralation between Grupo Mxico and Vanadium One

Assuming the 90 days horizon Grupo Mxico is expected to generate 85.87 times less return on investment than Vanadium One. But when comparing it to its historical volatility, Grupo Mxico SAB is 26.53 times less risky than Vanadium One. It trades about 0.03 of its potential returns per unit of risk. Vanadium One Iron is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  8.00  in Vanadium One Iron on October 11, 2024 and sell it today you would earn a total of  2.00  from holding Vanadium One Iron or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	19.19%
Values	Daily Returns

Grupo Mxico SAB  vs.  Vanadium One Iron

Grupo Mxico SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Mxico 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 basic 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.

Vanadium One Iron

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanadium One Iron has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vanadium One is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Grupo Mxico and Vanadium One

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

The idea behind Grupo Mxico SAB and Vanadium One Iron 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.