Correlation Between Fomento Economico and Webull Incentive

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

By analyzing existing cross correlation between Fomento Economico Mexicano and Webull Incentive, you can compare the effects of market volatilities on Fomento Economico and Webull Incentive 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 Fomento Economico with a short position of Webull Incentive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and Webull Incentive.

Diversification Opportunities for Fomento Economico and Webull Incentive

0.55

Correlation Coefficient

Fomento Economico  Webull Incentive

Very weak diversification

The 3 months correlation between Fomento and Webull is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and Webull Incentive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webull Incentive and Fomento Economico 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 Fomento Economico Mexicano are associated (or correlated) with Webull Incentive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webull Incentive has no effect on the direction of Fomento Economico i.e., Fomento Economico and Webull Incentive go up and down completely randomly.

Pair Corralation between Fomento Economico and Webull Incentive

Considering the 90-day investment horizon Fomento Economico Mexicano is expected to under-perform the Webull Incentive. But the stock apears to be less risky and, when comparing its historical volatility, Fomento Economico Mexicano is 25.72 times less risky than Webull Incentive. The stock trades about -0.08 of its potential returns per unit of risk. The Webull Incentive is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  379.00  in Webull Incentive on May 3, 2025 and sell it today you would lose (192.00) from holding Webull Incentive or give up 50.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	64.52%
Values	Daily Returns

Fomento Economico Mexicano  vs.  Webull Incentive

Fomento Economico

Risk-Adjusted Performance

Very Weak

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

Webull Incentive

Risk-Adjusted Performance

OK

Over the last 90 days Webull Incentive has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak essential indicators, Webull Incentive showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fomento Economico and Webull Incentive

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

The idea behind Fomento Economico Mexicano and Webull Incentive 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.