Correlation Between GMxico Transportes and Fideicomiso Irrevocable

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

By analyzing existing cross correlation between GMxico Transportes SAB and Fideicomiso Irrevocable No, you can compare the effects of market volatilities on GMxico Transportes and Fideicomiso Irrevocable 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 GMxico Transportes with a short position of Fideicomiso Irrevocable. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Fideicomiso Irrevocable.

Diversification Opportunities for GMxico Transportes and Fideicomiso Irrevocable

-0.21

Correlation Coefficient

GMxico Transportes  Fideicomiso Irrevocable

Very good diversification

The 3 months correlation between GMxico and Fideicomiso is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and Fideicomiso Irrevocable No in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fideicomiso Irrevocable and GMxico Transportes 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 GMxico Transportes SAB are associated (or correlated) with Fideicomiso Irrevocable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fideicomiso Irrevocable has no effect on the direction of GMxico Transportes i.e., GMxico Transportes and Fideicomiso Irrevocable go up and down completely randomly.

Pair Corralation between GMxico Transportes and Fideicomiso Irrevocable

Assuming the 90 days trading horizon GMxico Transportes SAB is expected to under-perform the Fideicomiso Irrevocable. In addition to that, GMxico Transportes is 1.93 times more volatile than Fideicomiso Irrevocable No. It trades about -0.03 of its total potential returns per unit of risk. Fideicomiso Irrevocable No is currently generating about 0.06 per unit of volatility. If you would invest  5,196  in Fideicomiso Irrevocable No on September 24, 2024 and sell it today you would earn a total of  404.00  from holding Fideicomiso Irrevocable No or generate 7.78% return on investment over 90 days.

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

GMxico Transportes SAB  vs.  Fideicomiso Irrevocable No

GMxico Transportes SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GMxico Transportes SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Fideicomiso Irrevocable

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GMxico Transportes and Fideicomiso Irrevocable

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

The idea behind GMxico Transportes SAB and Fideicomiso Irrevocable No 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.