Correlation Between Grupo Financiero and Marubeni

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

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

Diversification Opportunities for Grupo Financiero and Marubeni

0.43

Correlation Coefficient

Grupo Financiero  Marubeni

Very weak diversification

The 3 months correlation between Grupo and Marubeni is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Inbursa and Marubeni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marubeni and Grupo Financiero 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 Financiero Inbursa are associated (or correlated) with Marubeni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marubeni has no effect on the direction of Grupo Financiero i.e., Grupo Financiero and Marubeni go up and down completely randomly.

Pair Corralation between Grupo Financiero and Marubeni

Assuming the 90 days horizon Grupo Financiero is expected to generate 237.08 times less return on investment than Marubeni. But when comparing it to its historical volatility, Grupo Financiero Inbursa is 1.01 times less risky than Marubeni. It trades about 0.0 of its potential returns per unit of risk. Marubeni is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,470  in Marubeni on December 27, 2024 and sell it today you would earn a total of  230.00  from holding Marubeni or generate 15.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Grupo Financiero Inbursa  vs.  Marubeni

Grupo Financiero Inbursa

Risk-Adjusted Performance

Very Weak

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

Marubeni

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marubeni are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Marubeni reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Financiero and Marubeni

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

The idea behind Grupo Financiero Inbursa and Marubeni 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..