Correlation Between TonnerOne World and Fomento Economico

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

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

Diversification Opportunities for TonnerOne World and Fomento Economico

-0.13

Correlation Coefficient

TonnerOne World  Fomento Economico

Good diversification

The 3 months correlation between TonnerOne and Fomento is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding TonnerOne World Holdings and Fomento Economico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Economico and TonnerOne World 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 TonnerOne World Holdings are associated (or correlated) with Fomento Economico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Economico has no effect on the direction of TonnerOne World i.e., TonnerOne World and Fomento Economico go up and down completely randomly.

Pair Corralation between TonnerOne World and Fomento Economico

Given the investment horizon of 90 days TonnerOne World Holdings is expected to generate 12.85 times more return on investment than Fomento Economico. However, TonnerOne World is 12.85 times more volatile than Fomento Economico Mexicano. It trades about 0.04 of its potential returns per unit of risk. Fomento Economico Mexicano is currently generating about 0.08 per unit of risk. If you would invest  0.02  in TonnerOne World Holdings on August 5, 2025 and sell it today you would lose (0.01) from holding TonnerOne World Holdings or give up 50.0% of portfolio value over 90 days.

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

TonnerOne World Holdings  vs.  Fomento Economico Mexicano

TonnerOne World Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TonnerOne World Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, TonnerOne World reported solid returns over the last few months and may actually be approaching a breakup point.

Fomento Economico

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Fomento Economico Mexicano are ranked lower than 6 (%) 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.

Pair Trading with TonnerOne World and Fomento Economico

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

The idea behind TonnerOne World Holdings and Fomento Economico Mexicano 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.