Correlation Between GobiMin and El Puerto

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

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

Diversification Opportunities for GobiMin and El Puerto

-0.55

Correlation Coefficient

GobiMin  El Puerto

Excellent diversification

The 3 months correlation between GobiMin and ELPQF is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding GobiMin and El Puerto de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Puerto de and GobiMin 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 GobiMin are associated (or correlated) with El Puerto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Puerto de has no effect on the direction of GobiMin i.e., GobiMin and El Puerto go up and down completely randomly.

Pair Corralation between GobiMin and El Puerto

Assuming the 90 days horizon GobiMin is expected to generate 1.41 times less return on investment than El Puerto. But when comparing it to its historical volatility, GobiMin is 8.21 times less risky than El Puerto. It trades about 0.09 of its potential returns per unit of risk. El Puerto de is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  515.00  in El Puerto de on September 23, 2024 and sell it today you would earn a total of  9.00  from holding El Puerto de or generate 1.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	14.87%
Values	Daily Returns

GobiMin  vs.  El Puerto de

GobiMin

Risk-Adjusted Performance

0 of 100

Very Weak

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

El Puerto de

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GobiMin and El Puerto

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

The idea behind GobiMin and El Puerto 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.