Correlation Between GMxico Transportes and Schlumberger
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes and Schlumberger 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 GMxico Transportes and Schlumberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMxico Transportes SAB and Schlumberger Limited, you can compare the effects of market volatilities on GMxico Transportes and Schlumberger 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 GMxico Transportes with a short position of Schlumberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Schlumberger.
Diversification Opportunities for GMxico Transportes and Schlumberger
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GMxico and Schlumberger is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and Schlumberger Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger Limited and GMxico Transportes 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 GMxico Transportes SAB are associated (or correlated) with Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger Limited has no effect on the direction of GMxico Transportes i.e., GMxico Transportes and Schlumberger go up and down completely randomly.
Pair Corralation between GMxico Transportes and Schlumberger
Assuming the 90 days trading horizon GMxico Transportes SAB is expected to generate 0.72 times more return on investment than Schlumberger. However, GMxico Transportes SAB is 1.38 times less risky than Schlumberger. It trades about 0.14 of its potential returns per unit of risk. Schlumberger Limited is currently generating about -0.41 per unit of risk. If you would invest 3,092 in GMxico Transportes SAB on September 26, 2024 and sell it today you would earn a total of 108.00 from holding GMxico Transportes SAB or generate 3.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
GMxico Transportes SAB vs. Schlumberger Limited
Performance |
Timeline |
GMxico Transportes SAB |
Schlumberger Limited |
GMxico Transportes and Schlumberger Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GMxico Transportes and Schlumberger
The main advantage of trading using opposite GMxico Transportes and Schlumberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes position performs unexpectedly, Schlumberger 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 Schlumberger will offset losses from the drop in Schlumberger's long position.GMxico Transportes vs. Prudential Financial | GMxico Transportes vs. Capital One Financial | GMxico Transportes vs. DXC Technology | GMxico Transportes vs. Southwest Airlines |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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