Correlation Between Fomento Economico and US Foods

Can any of the company-specific risk be diversified away by investing in both Fomento Economico and US Foods 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 US Foods 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 US Foods Holding, you can compare the effects of market volatilities on Fomento Economico and US Foods 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 US Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and US Foods.

Diversification Opportunities for Fomento Economico and US Foods

-0.48

Correlation Coefficient

Fomento Economico  US Foods

Very good diversification

The 3 months correlation between Fomento and USFD is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and US Foods Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Foods Holding 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 US Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Foods Holding has no effect on the direction of Fomento Economico i.e., Fomento Economico and US Foods go up and down completely randomly.

Pair Corralation between Fomento Economico and US Foods

Considering the 90-day investment horizon Fomento Economico Mexicano is expected to generate 1.25 times more return on investment than US Foods. However, Fomento Economico is 1.25 times more volatile than US Foods Holding. It trades about 0.11 of its potential returns per unit of risk. US Foods Holding is currently generating about -0.15 per unit of risk. If you would invest  8,640  in Fomento Economico Mexicano on August 2, 2025 and sell it today you would earn a total of  920.00  from holding Fomento Economico Mexicano or generate 10.65% return on investment over 90 days.

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

Fomento Economico Mexicano  vs.  US Foods Holding

Fomento Economico

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Fomento Economico Mexicano are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal primary indicators, Fomento Economico may actually be approaching a critical reversion point that can send shares even higher in December 2025.

US Foods Holding

Risk-Adjusted Performance

Weakest

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

Pair Trading with Fomento Economico and US Foods

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

The idea behind Fomento Economico Mexicano and US Foods Holding 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.