Correlation Between Transport and Transimex Transportation

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

By analyzing existing cross correlation between Transport and Industry and Transimex Transportation JSC, you can compare the effects of market volatilities on Transport and Transimex Transportation 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 Transport with a short position of Transimex Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport and Transimex Transportation.

Diversification Opportunities for Transport and Transimex Transportation

0.02

Correlation Coefficient

Transport  Transimex Transportation

Significant diversification

The 3 months correlation between Transport and Transimex is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Transport and Industry and Transimex Transportation JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transimex Transportation and Transport 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 Transport and Industry are associated (or correlated) with Transimex Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transimex Transportation has no effect on the direction of Transport i.e., Transport and Transimex Transportation go up and down completely randomly.

Pair Corralation between Transport and Transimex Transportation

Assuming the 90 days trading horizon Transport and Industry is expected to generate 3.11 times more return on investment than Transimex Transportation. However, Transport is 3.11 times more volatile than Transimex Transportation JSC. It trades about 0.18 of its potential returns per unit of risk. Transimex Transportation JSC is currently generating about 0.14 per unit of risk. If you would invest  187,000  in Transport and Industry on May 2, 2025 and sell it today you would earn a total of  97,000  from holding Transport and Industry or generate 51.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	81.25%
Values	Daily Returns

Transport and Industry  vs.  Transimex Transportation JSC

Transport and Industry

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transport and Industry are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Transport displayed solid returns over the last few months and may actually be approaching a breakup point.

Transimex Transportation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Transimex Transportation JSC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Transimex Transportation may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Transport and Transimex Transportation

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

The idea behind Transport and Industry and Transimex Transportation JSC 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.