Correlation Between BK Variable and Myinvestor Indexado

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

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

Diversification Opportunities for BK Variable and Myinvestor Indexado

0.79

Correlation Coefficient

BK Variable  Myinvestor Indexado

Poor diversification

The 3 months correlation between 0P0000120T and Myinvestor is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding BK Variable Internacional and Myinvestor Indexado Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myinvestor Indexado and BK Variable 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 BK Variable Internacional 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 BK Variable i.e., BK Variable and Myinvestor Indexado go up and down completely randomly.

Pair Corralation between BK Variable and Myinvestor Indexado

Assuming the 90 days trading horizon BK Variable Internacional is expected to generate 1.34 times more return on investment than Myinvestor Indexado. However, BK Variable is 1.34 times more volatile than Myinvestor Indexado Global. It trades about 0.29 of its potential returns per unit of risk. Myinvestor Indexado Global is currently generating about 0.23 per unit of risk. If you would invest  1,751  in BK Variable Internacional on October 27, 2024 and sell it today you would earn a total of  75.00  from holding BK Variable Internacional or generate 4.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.0%
Values	Daily Returns

BK Variable Internacional  vs.  Myinvestor Indexado Global

BK Variable Internacional

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BK Variable Internacional are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, BK Variable may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 BK Variable and Myinvestor Indexado

The main advantage of trading using opposite BK Variable and Myinvestor Indexado positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BK Variable 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 BK Variable Internacional 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.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.