Correlation Between Grupo Bimbo and Calbee

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

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

Diversification Opportunities for Grupo Bimbo and Calbee

0.64

Correlation Coefficient

Grupo Bimbo  Calbee

Poor diversification

The 3 months correlation between Grupo and Calbee is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and Calbee Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calbee Inc and Grupo Bimbo 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 Grupo Bimbo SAB are associated (or correlated) with Calbee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calbee Inc has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and Calbee go up and down completely randomly.

Pair Corralation between Grupo Bimbo and Calbee

Assuming the 90 days horizon Grupo Bimbo SAB is expected to under-perform the Calbee. But the pink sheet apears to be less risky and, when comparing its historical volatility, Grupo Bimbo SAB is 1.25 times less risky than Calbee. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Calbee Inc is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  587.00  in Calbee Inc on September 24, 2024 and sell it today you would lose (90.00) from holding Calbee Inc or give up 15.33% of portfolio value over 90 days.

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

Grupo Bimbo SAB  vs.  Calbee Inc

Grupo Bimbo SAB

Risk-Adjusted Performance

0 of 100

Very Weak

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

Calbee Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calbee Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Grupo Bimbo and Calbee

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

The idea behind Grupo Bimbo SAB and Calbee Inc 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.