Correlation Between Coca-Cola FEMSA and RETAIL FOOD

Can any of the company-specific risk be diversified away by investing in both Coca-Cola FEMSA and RETAIL FOOD 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 Coca-Cola FEMSA and RETAIL FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coca Cola FEMSA SAB and RETAIL FOOD GROUP, you can compare the effects of market volatilities on Coca-Cola FEMSA and RETAIL FOOD 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 Coca-Cola FEMSA with a short position of RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca-Cola FEMSA and RETAIL FOOD.

Diversification Opportunities for Coca-Cola FEMSA and RETAIL FOOD

-0.73

Correlation Coefficient

Coca-Cola FEMSA  RETAIL FOOD

Pay attention - limited upside

The 3 months correlation between Coca-Cola and RETAIL is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Coca Cola FEMSA SAB and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP and Coca-Cola FEMSA 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 Coca Cola FEMSA SAB are associated (or correlated) with RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of Coca-Cola FEMSA i.e., Coca-Cola FEMSA and RETAIL FOOD go up and down completely randomly.

Pair Corralation between Coca-Cola FEMSA and RETAIL FOOD

Assuming the 90 days trading horizon Coca Cola FEMSA SAB is expected to under-perform the RETAIL FOOD. But the stock apears to be less risky and, when comparing its historical volatility, Coca Cola FEMSA SAB is 1.79 times less risky than RETAIL FOOD. The stock trades about -0.09 of its potential returns per unit of risk. The RETAIL FOOD GROUP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  93.00  in RETAIL FOOD GROUP on April 24, 2025 and sell it today you would earn a total of  6.00  from holding RETAIL FOOD GROUP or generate 6.45% return on investment over 90 days.

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

Coca Cola FEMSA SAB  vs.  RETAIL FOOD GROUP

Coca Cola FEMSA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coca Cola FEMSA SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady 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.

RETAIL FOOD GROUP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RETAIL FOOD GROUP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, RETAIL FOOD may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Coca-Cola FEMSA and RETAIL FOOD

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

The idea behind Coca Cola FEMSA SAB and RETAIL FOOD GROUP 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.