Correlation Between GMxico Transportes and Banco Actinver

Can any of the company-specific risk be diversified away by investing in both GMxico Transportes and Banco Actinver 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 Banco Actinver 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 Banco Actinver SA, you can compare the effects of market volatilities on GMxico Transportes and Banco Actinver 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 Banco Actinver. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Banco Actinver.

Diversification Opportunities for GMxico Transportes and Banco Actinver

-0.19

Correlation Coefficient

GMxico Transportes  Banco Actinver

Good diversification

The 3 months correlation between GMxico and Banco is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and Banco Actinver SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Actinver SA 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 Banco Actinver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Actinver SA has no effect on the direction of GMxico Transportes i.e., GMxico Transportes and Banco Actinver go up and down completely randomly.

Pair Corralation between GMxico Transportes and Banco Actinver

Assuming the 90 days trading horizon GMxico Transportes SAB is expected to generate 0.29 times more return on investment than Banco Actinver. However, GMxico Transportes SAB is 3.48 times less risky than Banco Actinver. It trades about 0.15 of its potential returns per unit of risk. Banco Actinver SA is currently generating about -0.21 per unit of risk. If you would invest  3,104  in GMxico Transportes SAB on December 4, 2024 and sell it today you would earn a total of  80.00  from holding GMxico Transportes SAB or generate 2.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

GMxico Transportes SAB  vs.  Banco Actinver SA

GMxico Transportes SAB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GMxico Transportes SAB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, GMxico Transportes is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Banco Actinver SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Banco Actinver SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with GMxico Transportes and Banco Actinver

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

The idea behind GMxico Transportes SAB and Banco Actinver SA 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.