Correlation Between Grupo Mxico and Evolution Mining

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

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

Diversification Opportunities for Grupo Mxico and Evolution Mining

-0.55

Correlation Coefficient

Grupo Mxico  Evolution Mining

Excellent diversification

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

Pair Corralation between Grupo Mxico and Evolution Mining

Assuming the 90 days horizon Grupo Mxico SAB is expected to generate 0.56 times more return on investment than Evolution Mining. However, Grupo Mxico SAB is 1.8 times less risky than Evolution Mining. It trades about 0.16 of its potential returns per unit of risk. Evolution Mining is currently generating about -0.03 per unit of risk. If you would invest  512.00  in Grupo Mxico SAB on May 5, 2025 and sell it today you would earn a total of  116.00  from holding Grupo Mxico SAB or generate 22.66% return on investment over 90 days.

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

Grupo Mxico SAB  vs.  Evolution Mining

Grupo Mxico SAB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Mxico SAB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Grupo Mxico reported solid returns over the last few months and may actually be approaching a breakup point.

Evolution Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolution Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Grupo Mxico and Evolution Mining

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

The idea behind Grupo Mxico SAB and Evolution Mining 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.