Correlation Between Grupo Herdez and Apple
Can any of the company-specific risk be diversified away by investing in both Grupo Herdez and Apple 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 Herdez and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Herdez SAB and Apple Inc, you can compare the effects of market volatilities on Grupo Herdez and Apple 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 Herdez with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Herdez and Apple.
Diversification Opportunities for Grupo Herdez and Apple
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Apple is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Herdez SAB and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Grupo Herdez 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 Herdez SAB are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Grupo Herdez i.e., Grupo Herdez and Apple go up and down completely randomly.
Pair Corralation between Grupo Herdez and Apple
Assuming the 90 days horizon Grupo Herdez SAB is expected to generate 1.15 times more return on investment than Apple. However, Grupo Herdez is 1.15 times more volatile than Apple Inc. It trades about 0.14 of its potential returns per unit of risk. Apple Inc is currently generating about -0.03 per unit of risk. If you would invest 260.00 in Grupo Herdez SAB on January 25, 2024 and sell it today you would earn a total of 13.00 from holding Grupo Herdez SAB or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Herdez SAB vs. Apple Inc
Performance |
| Timeline |
| Grupo Herdez SAB |
| Apple Inc |
Grupo Herdez and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Herdez and Apple
The main advantage of trading using opposite Grupo Herdez and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Herdez position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Grupo Herdez vs. Kellanova | Grupo Herdez vs. Lancaster Colony | Grupo Herdez vs. The A2 Milk | Grupo Herdez vs. Artisan Consumer Goods |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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