Correlation Between Servicios Corporativos and Grupo Profuturo

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

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

Diversification Opportunities for Servicios Corporativos and Grupo Profuturo

-0.25

Correlation Coefficient

Servicios Corporativos  Grupo Profuturo

Very good diversification

The 3 months correlation between Servicios and Grupo is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Servicios Corporativos Javer and Grupo Profuturo SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Profuturo SAB and Servicios Corporativos 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 Servicios Corporativos Javer are associated (or correlated) with Grupo Profuturo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Profuturo SAB has no effect on the direction of Servicios Corporativos i.e., Servicios Corporativos and Grupo Profuturo go up and down completely randomly.

Pair Corralation between Servicios Corporativos and Grupo Profuturo

Assuming the 90 days trading horizon Servicios Corporativos is expected to generate 191.92 times less return on investment than Grupo Profuturo. But when comparing it to its historical volatility, Servicios Corporativos Javer is 2.41 times less risky than Grupo Profuturo. It trades about 0.0 of its potential returns per unit of risk. Grupo Profuturo SAB is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  10,500  in Grupo Profuturo SAB on December 30, 2024 and sell it today you would earn a total of  1,700  from holding Grupo Profuturo SAB or generate 16.19% return on investment over 90 days.

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

Servicios Corporativos Javer  vs.  Grupo Profuturo SAB

Servicios Corporativos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Servicios Corporativos Javer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Servicios Corporativos is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Grupo Profuturo SAB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Profuturo SAB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Grupo Profuturo unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Servicios Corporativos and Grupo Profuturo

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

The idea behind Servicios Corporativos Javer and Grupo Profuturo 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.