Correlation Between Grupo Comercial and Sendas Distribuidora

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

By analyzing existing cross correlation between Grupo Comercial Chedraui and Sendas Distribuidora SA, you can compare the effects of market volatilities on Grupo Comercial and Sendas Distribuidora 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 Comercial with a short position of Sendas Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Comercial and Sendas Distribuidora.

Diversification Opportunities for Grupo Comercial and Sendas Distribuidora

0.73

Correlation Coefficient

Grupo Comercial  Sendas Distribuidora

Poor diversification

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

Pair Corralation between Grupo Comercial and Sendas Distribuidora

Assuming the 90 days trading horizon Grupo Comercial Chedraui is expected to generate 0.64 times more return on investment than Sendas Distribuidora. However, Grupo Comercial Chedraui is 1.56 times less risky than Sendas Distribuidora. It trades about 0.09 of its potential returns per unit of risk. Sendas Distribuidora SA is currently generating about 0.05 per unit of risk. If you would invest  12,860  in Grupo Comercial Chedraui on April 24, 2025 and sell it today you would earn a total of  1,151  from holding Grupo Comercial Chedraui or generate 8.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Grupo Comercial Chedraui  vs.  Sendas Distribuidora SA

Grupo Comercial Chedraui

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Comercial Chedraui are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Grupo Comercial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Sendas Distribuidora

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Grupo Comercial and Sendas Distribuidora

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

The idea behind Grupo Comercial Chedraui and Sendas Distribuidora SA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.