Correlation Between GMxico Transportes and FIBRA Storage

Can any of the company-specific risk be diversified away by investing in both GMxico Transportes and FIBRA Storage 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 FIBRA Storage 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 FIBRA Storage, you can compare the effects of market volatilities on GMxico Transportes and FIBRA Storage 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 FIBRA Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and FIBRA Storage.

Diversification Opportunities for GMxico Transportes and FIBRA Storage

-0.78

Correlation Coefficient

GMxico Transportes  FIBRA Storage

Pay attention - limited upside

The 3 months correlation between GMxico and FIBRA is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and FIBRA Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Storage 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 FIBRA Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBRA Storage has no effect on the direction of GMxico Transportes i.e., GMxico Transportes and FIBRA Storage go up and down completely randomly.

Pair Corralation between GMxico Transportes and FIBRA Storage

Assuming the 90 days trading horizon GMxico Transportes is expected to generate 20.41 times less return on investment than FIBRA Storage. In addition to that, GMxico Transportes is 1.59 times more volatile than FIBRA Storage. It trades about 0.01 of its total potential returns per unit of risk. FIBRA Storage is currently generating about 0.19 per unit of volatility. If you would invest  1,530  in FIBRA Storage on September 4, 2024 and sell it today you would earn a total of  252.00  from holding FIBRA Storage or generate 16.47% return on investment over 90 days.

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

GMxico Transportes SAB  vs.  FIBRA Storage

GMxico Transportes SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GMxico Transportes SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, GMxico Transportes is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

FIBRA Storage

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Storage are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, FIBRA Storage exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GMxico Transportes and FIBRA Storage

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

The idea behind GMxico Transportes SAB and FIBRA Storage 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 Anywhere module to track or share privately all of your investments from the convenience of any device.