Correlation Between Grupo Profuturo and Alsea SAB

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

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

Diversification Opportunities for Grupo Profuturo and Alsea SAB

0.06

Correlation Coefficient

Grupo Profuturo  Alsea SAB

Significant diversification

The 3 months correlation between Grupo and Alsea is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Profuturo SAB and Alsea SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alsea SAB de and Grupo Profuturo 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 Profuturo SAB are associated (or correlated) with Alsea SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alsea SAB de has no effect on the direction of Grupo Profuturo i.e., Grupo Profuturo and Alsea SAB go up and down completely randomly.

Pair Corralation between Grupo Profuturo and Alsea SAB

Assuming the 90 days trading horizon Grupo Profuturo SAB is expected to generate 1.15 times more return on investment than Alsea SAB. However, Grupo Profuturo is 1.15 times more volatile than Alsea SAB de. It trades about 0.15 of its potential returns per unit of risk. Alsea SAB de is currently generating about -0.16 per unit of risk. If you would invest  9,500  in Grupo Profuturo SAB on September 12, 2024 and sell it today you would earn a total of  500.00  from holding Grupo Profuturo SAB or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Grupo Profuturo SAB  vs.  Alsea SAB de

Grupo Profuturo SAB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Profuturo SAB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Grupo Profuturo is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Alsea SAB de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alsea SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Grupo Profuturo and Alsea SAB

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

The idea behind Grupo Profuturo SAB and Alsea SAB 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..