Correlation Between Naranja Renta and Myinvestor Indexado

Can any of the company-specific risk be diversified away by investing in both Naranja Renta and Myinvestor Indexado 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 Naranja Renta and Myinvestor Indexado into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Naranja Renta Fija and Myinvestor Indexado Global, you can compare the effects of market volatilities on Naranja Renta and Myinvestor Indexado 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 Naranja Renta with a short position of Myinvestor Indexado. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naranja Renta and Myinvestor Indexado.

Diversification Opportunities for Naranja Renta and Myinvestor Indexado

0.42

Correlation Coefficient

Naranja Renta  Myinvestor Indexado

Very weak diversification

The 3 months correlation between Naranja and Myinvestor is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Naranja Renta Fija and Myinvestor Indexado Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myinvestor Indexado and Naranja Renta 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 Naranja Renta Fija are associated (or correlated) with Myinvestor Indexado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myinvestor Indexado has no effect on the direction of Naranja Renta i.e., Naranja Renta and Myinvestor Indexado go up and down completely randomly.

Pair Corralation between Naranja Renta and Myinvestor Indexado

Assuming the 90 days trading horizon Naranja Renta Fija is expected to under-perform the Myinvestor Indexado. But the fund apears to be less risky and, when comparing its historical volatility, Naranja Renta Fija is 3.95 times less risky than Myinvestor Indexado. The fund trades about -0.17 of its potential returns per unit of risk. The Myinvestor Indexado Global is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,610  in Myinvestor Indexado Global on October 27, 2024 and sell it today you would earn a total of  37.00  from holding Myinvestor Indexado Global or generate 2.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

Naranja Renta Fija  vs.  Myinvestor Indexado Global

Naranja Renta Fija

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Naranja Renta Fija has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Naranja Renta is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Myinvestor Indexado

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Myinvestor Indexado Global are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite quite unsteady essential indicators, Myinvestor Indexado may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Naranja Renta and Myinvestor Indexado

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

The idea behind Naranja Renta Fija and Myinvestor Indexado Global 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.