Correlation Between Gruma SAB and Organizacin Soriana

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

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

Diversification Opportunities for Gruma SAB and Organizacin Soriana

-0.43

Correlation Coefficient

Gruma SAB  Organizacin Soriana

Very good diversification

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

Pair Corralation between Gruma SAB and Organizacin Soriana

Assuming the 90 days trading horizon Gruma SAB de is expected to under-perform the Organizacin Soriana. In addition to that, Gruma SAB is 1.29 times more volatile than Organizacin Soriana S. It trades about -0.09 of its total potential returns per unit of risk. Organizacin Soriana S is currently generating about 0.08 per unit of volatility. If you would invest  2,930  in Organizacin Soriana S on October 21, 2024 and sell it today you would earn a total of  150.00  from holding Organizacin Soriana S or generate 5.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Gruma SAB de  vs.  Organizacin Soriana S

Gruma SAB de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gruma SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Organizacin Soriana

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Organizacin Soriana S are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Organizacin Soriana is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gruma SAB and Organizacin Soriana

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

The idea behind Gruma SAB de and Organizacin Soriana S 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.