Correlation Between Kimberly Clark and Mdica Sur

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

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

Diversification Opportunities for Kimberly Clark and Mdica Sur

-0.42

Correlation Coefficient

Kimberly Clark  Mdica Sur

Very good diversification

The 3 months correlation between Kimberly and Mdica is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kimberly Clark de Mxico and Mdica Sur SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mdica Sur SAB and Kimberly Clark 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 Kimberly Clark de Mxico are associated (or correlated) with Mdica Sur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mdica Sur SAB has no effect on the direction of Kimberly Clark i.e., Kimberly Clark and Mdica Sur go up and down completely randomly.

Pair Corralation between Kimberly Clark and Mdica Sur

Assuming the 90 days trading horizon Kimberly Clark is expected to generate 1.28 times less return on investment than Mdica Sur. In addition to that, Kimberly Clark is 1.26 times more volatile than Mdica Sur SAB. It trades about 0.16 of its total potential returns per unit of risk. Mdica Sur SAB is currently generating about 0.25 per unit of volatility. If you would invest  3,200  in Mdica Sur SAB on September 26, 2024 and sell it today you would earn a total of  223.00  from holding Mdica Sur SAB or generate 6.97% return on investment over 90 days.

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

Kimberly Clark de Mxico  vs.  Mdica Sur SAB

Kimberly Clark de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kimberly Clark de Mxico has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mdica Sur SAB

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mdica Sur SAB are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Mdica Sur sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kimberly Clark and Mdica Sur

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

The idea behind Kimberly Clark de Mxico and Mdica Sur 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.