Correlation Between Mondee Holdings and GMxico Transportes

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

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

Diversification Opportunities for Mondee Holdings and GMxico Transportes

-0.2

Correlation Coefficient

Mondee Holdings  GMxico Transportes

Good diversification

The 3 months correlation between Mondee and GMxico is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Mondee Holdings and GMxico Transportes SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMxico Transportes SAB and Mondee Holdings 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 Mondee Holdings are associated (or correlated) with GMxico Transportes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMxico Transportes SAB has no effect on the direction of Mondee Holdings i.e., Mondee Holdings and GMxico Transportes go up and down completely randomly.

Pair Corralation between Mondee Holdings and GMxico Transportes

Given the investment horizon of 90 days Mondee Holdings is expected to under-perform the GMxico Transportes. In addition to that, Mondee Holdings is 1.3 times more volatile than GMxico Transportes SAB. It trades about -0.03 of its total potential returns per unit of risk. GMxico Transportes SAB is currently generating about 0.12 per unit of volatility. If you would invest  38.00  in GMxico Transportes SAB on January 30, 2024 and sell it today you would earn a total of  190.00  from holding GMxico Transportes SAB or generate 500.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.74%
Values	Daily Returns

Mondee Holdings  vs.  GMxico Transportes SAB

Mondee Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mondee Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

GMxico Transportes SAB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GMxico Transportes SAB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, GMxico Transportes reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mondee Holdings and GMxico Transportes

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

The idea behind Mondee Holdings and GMxico Transportes 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.