Correlation Between Procorp SAB and Grupo Sports

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

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

Diversification Opportunities for Procorp SAB and Grupo Sports

0.0

Correlation Coefficient

Procorp SAB  Grupo Sports

Pay attention - limited upside

The 3 months correlation between Procorp and Grupo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Procorp SAB de and Grupo Sports World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Sports World and Procorp SAB 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 Procorp SAB de are associated (or correlated) with Grupo Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Sports World has no effect on the direction of Procorp SAB i.e., Procorp SAB and Grupo Sports go up and down completely randomly.

Pair Corralation between Procorp SAB and Grupo Sports

Assuming the 90 days trading horizon Procorp SAB is expected to generate 3.23 times less return on investment than Grupo Sports. But when comparing it to its historical volatility, Procorp SAB de is 1.18 times less risky than Grupo Sports. It trades about 0.02 of its potential returns per unit of risk. Grupo Sports World is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  394.00  in Grupo Sports World on December 5, 2024 and sell it today you would earn a total of  226.00  from holding Grupo Sports World or generate 57.36% return on investment over 90 days.

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

Procorp SAB de  vs.  Grupo Sports World

Procorp SAB de

Risk-Adjusted Performance

Very Weak

Over the last 90 days Procorp SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Procorp SAB is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Grupo Sports World

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Sports World has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Grupo Sports is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Procorp SAB and Grupo Sports

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

The idea behind Procorp SAB de and Grupo Sports World 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.