Correlation Between INVEX Controladora and Grupo Herdez

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

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

Diversification Opportunities for INVEX Controladora and Grupo Herdez

0.75

Correlation Coefficient

INVEX Controladora  Grupo Herdez

Poor diversification

The 3 months correlation between INVEX and Grupo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding INVEX Controladora SAB and Grupo Herdez SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Herdez SAB and INVEX Controladora 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 INVEX Controladora SAB are associated (or correlated) with Grupo Herdez. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Herdez SAB has no effect on the direction of INVEX Controladora i.e., INVEX Controladora and Grupo Herdez go up and down completely randomly.

Pair Corralation between INVEX Controladora and Grupo Herdez

If you would invest  5,500  in Grupo Herdez SAB on October 26, 2024 and sell it today you would earn a total of  5.00  from holding Grupo Herdez SAB or generate 0.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

INVEX Controladora SAB  vs.  Grupo Herdez SAB

INVEX Controladora SAB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in INVEX Controladora SAB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, INVEX Controladora is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Grupo Herdez SAB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Herdez SAB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grupo Herdez may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with INVEX Controladora and Grupo Herdez

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

The idea behind INVEX Controladora SAB and Grupo Herdez SAB 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.