Correlation Between Axtel SAB and Nemak S

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

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

Diversification Opportunities for Axtel SAB and Nemak S

-0.29

Correlation Coefficient

Axtel SAB  Nemak S

Very good diversification

The 3 months correlation between Axtel and Nemak is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Axtel SAB de and Nemak S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nemak S A and Axtel 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 Axtel SAB de are associated (or correlated) with Nemak S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nemak S A has no effect on the direction of Axtel SAB i.e., Axtel SAB and Nemak S go up and down completely randomly.

Pair Corralation between Axtel SAB and Nemak S

Assuming the 90 days trading horizon Axtel SAB is expected to generate 62.17 times less return on investment than Nemak S. In addition to that, Axtel SAB is 1.14 times more volatile than Nemak S A. It trades about 0.0 of its total potential returns per unit of risk. Nemak S A is currently generating about 0.05 per unit of volatility. If you would invest  207.00  in Nemak S A on September 12, 2024 and sell it today you would earn a total of  15.00  from holding Nemak S A or generate 7.25% return on investment over 90 days.

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

Axtel SAB de  vs.  Nemak S A

Axtel SAB de

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nemak S A

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nemak S A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Nemak S may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Axtel SAB and Nemak S

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

The idea behind Axtel SAB de and Nemak S A 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 CEOs Directory module to screen CEOs from public companies around the world.