Correlation Between Corporativo GBM and Casa De

Can any of the company-specific risk be diversified away by investing in both Corporativo GBM and Casa De 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 Corporativo GBM and Casa De into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Corporativo GBM and Casa De

-0.88

Correlation Coefficient

Corporativo GBM  Casa De

Pay attention - limited upside

The 3 months correlation between Corporativo and Casa is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Corporativo GBM SAB and Casa de Bolsa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casa de Bolsa and Corporativo GBM 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 Corporativo GBM SAB are associated (or correlated) with Casa De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casa de Bolsa has no effect on the direction of Corporativo GBM i.e., Corporativo GBM and Casa De go up and down completely randomly.

Pair Corralation between Corporativo GBM and Casa De

Assuming the 90 days trading horizon Corporativo GBM SAB is expected to under-perform the Casa De. In addition to that, Corporativo GBM is 1.34 times more volatile than Casa de Bolsa. It trades about -0.27 of its total potential returns per unit of risk. Casa de Bolsa is currently generating about 0.12 per unit of volatility. If you would invest  2,680  in Casa de Bolsa on September 29, 2024 and sell it today you would earn a total of  256.00  from holding Casa de Bolsa or generate 9.55% return on investment over 90 days.

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

Corporativo GBM SAB  vs.  Casa de Bolsa

Corporativo GBM SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corporativo GBM SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Casa de Bolsa

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Casa de Bolsa are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Casa De is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Corporativo GBM and Casa De

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

The idea behind Corporativo GBM SAB and Casa de Bolsa 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.