Correlation Between Vail Resorts and Grupo México

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

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

Diversification Opportunities for Vail Resorts and Grupo México

0.1

Correlation Coefficient

Vail Resorts  Grupo México

Average diversification

The 3 months correlation between Vail and Grupo is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vail Resorts 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 Vail Resorts 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 Vail Resorts are associated (or correlated) with Grupo México. 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 Vail Resorts i.e., Vail Resorts and Grupo México go up and down completely randomly.

Pair Corralation between Vail Resorts and Grupo México

Assuming the 90 days horizon Vail Resorts is expected to generate 0.94 times more return on investment than Grupo México. However, Vail Resorts is 1.06 times less risky than Grupo México. It trades about -0.22 of its potential returns per unit of risk. Grupo Mxico SAB is currently generating about -0.27 per unit of risk. If you would invest  16,100  in Vail Resorts on December 11, 2024 and sell it today you would lose (1,600) from holding Vail Resorts or give up 9.94% of portfolio value over 90 days.

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

Vail Resorts  vs.  Grupo Mxico SAB

Vail Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vail Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Grupo Mxico SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Mxico SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Vail Resorts and Grupo México

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

The idea behind Vail Resorts 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.