Correlation Between Grupo Sports and Corporativo GBM
Can any of the company-specific risk be diversified away by investing in both Grupo Sports and Corporativo GBM 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 Grupo Sports and Corporativo GBM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Sports World and Corporativo GBM SAB, you can compare the effects of market volatilities on Grupo Sports and Corporativo GBM 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 Grupo Sports with a short position of Corporativo GBM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and Corporativo GBM.
Diversification Opportunities for Grupo Sports and Corporativo GBM
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and Corporativo is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World and Corporativo GBM SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporativo GBM SAB and Grupo Sports 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 Grupo Sports World are associated (or correlated) with Corporativo GBM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporativo GBM SAB has no effect on the direction of Grupo Sports i.e., Grupo Sports and Corporativo GBM go up and down completely randomly.
Pair Corralation between Grupo Sports and Corporativo GBM
Assuming the 90 days trading horizon Grupo Sports World is expected to generate 1.46 times more return on investment than Corporativo GBM. However, Grupo Sports is 1.46 times more volatile than Corporativo GBM SAB. It trades about 0.03 of its potential returns per unit of risk. Corporativo GBM SAB is currently generating about -0.38 per unit of risk. If you would invest 578.00 in Grupo Sports World on October 20, 2024 and sell it today you would earn a total of 17.00 from holding Grupo Sports World or generate 2.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Grupo Sports World vs. Corporativo GBM SAB
Performance |
Timeline |
Grupo Sports World |
Corporativo GBM SAB |
Grupo Sports and Corporativo GBM Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo Sports and Corporativo GBM
The main advantage of trading using opposite Grupo Sports and Corporativo GBM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports position performs unexpectedly, Corporativo GBM 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 Corporativo GBM will offset losses from the drop in Corporativo GBM's long position.Grupo Sports vs. Genworth Financial | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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