Correlation Between Seagen and Grupo Bimbo

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Can any of the company-specific risk be diversified away by investing in both Seagen and Grupo Bimbo 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 Seagen and Grupo Bimbo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seagen Inc and Grupo Bimbo SAB, you can compare the effects of market volatilities on Seagen and Grupo Bimbo 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 Seagen with a short position of Grupo Bimbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seagen and Grupo Bimbo.

Diversification Opportunities for Seagen and Grupo Bimbo

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Seagen and Grupo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Seagen Inc and Grupo Bimbo SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Bimbo SAB and Seagen 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 Seagen Inc are associated (or correlated) with Grupo Bimbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Bimbo SAB has no effect on the direction of Seagen i.e., Seagen and Grupo Bimbo go up and down completely randomly.

Pair Corralation between Seagen and Grupo Bimbo

Given the investment horizon of 90 days Seagen Inc is expected to under-perform the Grupo Bimbo. But the stock apears to be less risky and, when comparing its historical volatility, Seagen Inc is 2.24 times less risky than Grupo Bimbo. The stock trades about -0.08 of its potential returns per unit of risk. The Grupo Bimbo SAB is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,366  in Grupo Bimbo SAB on August 30, 2022 and sell it today you would earn a total of  334.00  from holding Grupo Bimbo SAB or generate 24.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy90.48%
ValuesDaily Returns

Seagen Inc  vs.  Grupo Bimbo SAB

 Performance (%) 
       Timeline  
Seagen Inc 
Seagen Performance
0 of 100
Over the last 90 days Seagen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in December 2022. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Seagen Price Channel

Grupo Bimbo SAB 
Grupo Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Bimbo SAB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Grupo Bimbo showed solid returns over the last few months and may actually be approaching a breakup point.

Grupo Price Channel

Seagen and Grupo Bimbo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Seagen and Grupo Bimbo

The main advantage of trading using opposite Seagen and Grupo Bimbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seagen position performs unexpectedly, Grupo Bimbo 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 Grupo Bimbo will offset losses from the drop in Grupo Bimbo's long position.
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The idea behind Seagen Inc and Grupo Bimbo SAB 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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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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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