Correlation Between EHEALTH and Grupo Mxico
Can any of the company-specific risk be diversified away by investing in both EHEALTH and Grupo Mxico 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 EHEALTH and Grupo Mxico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and Grupo Mxico SAB, you can compare the effects of market volatilities on EHEALTH and Grupo Mxico 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 EHEALTH with a short position of Grupo Mxico. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and Grupo Mxico.
Diversification Opportunities for EHEALTH and Grupo Mxico
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EHEALTH and Grupo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and Grupo Mxico SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Mxico SAB and EHEALTH 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 EHEALTH are associated (or correlated) with Grupo Mxico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Mxico SAB has no effect on the direction of EHEALTH i.e., EHEALTH and Grupo Mxico go up and down completely randomly.
Pair Corralation between EHEALTH and Grupo Mxico
Assuming the 90 days trading horizon EHEALTH is expected to generate 1.23 times more return on investment than Grupo Mxico. However, EHEALTH is 1.23 times more volatile than Grupo Mxico SAB. It trades about 0.28 of its potential returns per unit of risk. Grupo Mxico SAB is currently generating about 0.2 per unit of risk. If you would invest 466.00 in EHEALTH on September 23, 2024 and sell it today you would earn a total of 313.00 from holding EHEALTH or generate 67.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
EHEALTH vs. Grupo Mxico SAB
Performance |
Timeline |
EHEALTH |
Grupo Mxico SAB |
EHEALTH and Grupo Mxico Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EHEALTH and Grupo Mxico
The main advantage of trading using opposite EHEALTH and Grupo Mxico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH position performs unexpectedly, Grupo Mxico 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 Mxico will offset losses from the drop in Grupo Mxico's long position.The idea behind EHEALTH and Grupo Mxico 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.Grupo Mxico vs. BHP Group Limited | Grupo Mxico vs. BHP Group Limited | Grupo Mxico vs. Rio Tinto Group | Grupo Mxico vs. Rio Tinto Group |
Check out your portfolio center.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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |