Correlation Between Grupo Bimbo and Alfa SAB

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

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

Diversification Opportunities for Grupo Bimbo and Alfa SAB

-0.08

Correlation Coefficient

Grupo Bimbo  Alfa SAB

Good diversification

The 3 months correlation between Grupo and Alfa is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Bimbo SAB and Alfa SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa SAB de and Grupo Bimbo 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 Bimbo SAB are associated (or correlated) with Alfa SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa SAB de has no effect on the direction of Grupo Bimbo i.e., Grupo Bimbo and Alfa SAB go up and down completely randomly.

Pair Corralation between Grupo Bimbo and Alfa SAB

Assuming the 90 days trading horizon Grupo Bimbo SAB is expected to under-perform the Alfa SAB. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Bimbo SAB is 1.23 times less risky than Alfa SAB. The stock trades about -0.23 of its potential returns per unit of risk. The Alfa SAB de is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,442  in Alfa SAB de on April 25, 2025 and sell it today you would earn a total of  3.00  from holding Alfa SAB de or generate 0.21% return on investment over 90 days.

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

Grupo Bimbo SAB  vs.  Alfa SAB de

Grupo Bimbo SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Bimbo SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Alfa SAB de

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alfa SAB de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Alfa SAB is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Grupo Bimbo and Alfa SAB

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

The idea behind Grupo Bimbo SAB and Alfa SAB de 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.