Correlation Between Nemak S and Grupo Hotelero
Can any of the company-specific risk be diversified away by investing in both Nemak S and Grupo Hotelero 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 Nemak S and Grupo Hotelero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nemak S A and Grupo Hotelero Santa, you can compare the effects of market volatilities on Nemak S and Grupo Hotelero 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 Nemak S with a short position of Grupo Hotelero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nemak S and Grupo Hotelero.
Diversification Opportunities for Nemak S and Grupo Hotelero
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nemak and Grupo is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nemak S A and Grupo Hotelero Santa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Hotelero Santa and Nemak S 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 Nemak S A are associated (or correlated) with Grupo Hotelero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Hotelero Santa has no effect on the direction of Nemak S i.e., Nemak S and Grupo Hotelero go up and down completely randomly.
Pair Corralation between Nemak S and Grupo Hotelero
Assuming the 90 days trading horizon Nemak S A is expected to generate 1.87 times more return on investment than Grupo Hotelero. However, Nemak S is 1.87 times more volatile than Grupo Hotelero Santa. It trades about 0.49 of its potential returns per unit of risk. Grupo Hotelero Santa is currently generating about -0.02 per unit of risk. If you would invest 175.00 in Nemak S A on September 25, 2024 and sell it today you would earn a total of 104.00 from holding Nemak S A or generate 59.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Nemak S A vs. Grupo Hotelero Santa
Performance |
Timeline |
Nemak S A |
Grupo Hotelero Santa |
Nemak S and Grupo Hotelero Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nemak S and Grupo Hotelero
The main advantage of trading using opposite Nemak S and Grupo Hotelero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nemak S position performs unexpectedly, Grupo Hotelero 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 Hotelero will offset losses from the drop in Grupo Hotelero's long position.Nemak S vs. Prudential Financial | Nemak S vs. UnitedHealth Group Incorporated | Nemak S vs. The Bank of | Nemak S vs. Capital One Financial |
Grupo Hotelero vs. First Republic Bank | Grupo Hotelero vs. FIBRA Storage | Grupo Hotelero vs. Verizon Communications | Grupo Hotelero vs. Applied Materials |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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