Correlation Between Industrias and G Collado

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

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

Diversification Opportunities for Industrias and G Collado

-0.69

Correlation Coefficient

Industrias  G Collado

Excellent diversification

The 3 months correlation between Industrias and COLLADO is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Industrias CH S and G Collado SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Collado SAB and Industrias 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 Industrias CH S are associated (or correlated) with G Collado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Collado SAB has no effect on the direction of Industrias i.e., Industrias and G Collado go up and down completely randomly.

Pair Corralation between Industrias and G Collado

Assuming the 90 days trading horizon Industrias CH S is expected to under-perform the G Collado. In addition to that, Industrias is 3.25 times more volatile than G Collado SAB. It trades about -0.05 of its total potential returns per unit of risk. G Collado SAB is currently generating about 0.13 per unit of volatility. If you would invest  759.00  in G Collado SAB on September 29, 2024 and sell it today you would earn a total of  21.00  from holding G Collado SAB or generate 2.77% return on investment over 90 days.

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

Industrias CH S  vs.  G Collado SAB

Industrias CH S

Risk-Adjusted Performance

0 of 100

Very Weak

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

G Collado SAB

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G Collado SAB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, G Collado is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Industrias and G Collado

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

The idea behind Industrias CH S and G Collado SAB 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.