Correlation Between GMxico Transportes and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes and Procter Gamble 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 Procter Gamble 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 Procter Gamble DRC, you can compare the effects of market volatilities on GMxico Transportes and Procter Gamble 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 Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Procter Gamble.
Diversification Opportunities for GMxico Transportes and Procter Gamble
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GMxico and Procter is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and Procter Gamble DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble DRC 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 Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble DRC has no effect on the direction of GMxico Transportes i.e., GMxico Transportes and Procter Gamble go up and down completely randomly.
Pair Corralation between GMxico Transportes and Procter Gamble
Assuming the 90 days trading horizon GMxico Transportes SAB is expected to under-perform the Procter Gamble. In addition to that, GMxico Transportes is 1.14 times more volatile than Procter Gamble DRC. It trades about -0.04 of its total potential returns per unit of risk. Procter Gamble DRC is currently generating about 0.01 per unit of volatility. If you would invest 338,030 in Procter Gamble DRC on September 23, 2024 and sell it today you would earn a total of 771.00 from holding Procter Gamble DRC or generate 0.23% 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. Procter Gamble DRC
Performance |
Timeline |
GMxico Transportes SAB |
Procter Gamble DRC |
GMxico Transportes and Procter Gamble Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GMxico Transportes and Procter Gamble
The main advantage of trading using opposite GMxico Transportes and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.GMxico Transportes vs. Grupo Mxico SAB | GMxico Transportes vs. Impulsora del Desarrollo | GMxico Transportes vs. The Walt Disney | GMxico Transportes vs. Walmart |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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