Correlation Between Indexa Ms and BK Variable

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

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

Diversification Opportunities for Indexa Ms and BK Variable

0.15

Correlation Coefficient

Indexa Ms  BK Variable

Average diversification

The 3 months correlation between Indexa and 0P0000120T is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Indexa Ms Rentabilidad and BK Variable Internacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Variable Internacional and Indexa Ms 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 Indexa Ms Rentabilidad are associated (or correlated) with BK Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Variable Internacional has no effect on the direction of Indexa Ms i.e., Indexa Ms and BK Variable go up and down completely randomly.

Pair Corralation between Indexa Ms and BK Variable

Assuming the 90 days trading horizon Indexa Ms is expected to generate 11.49 times less return on investment than BK Variable. But when comparing it to its historical volatility, Indexa Ms Rentabilidad is 2.06 times less risky than BK Variable. It trades about 0.02 of its potential returns per unit of risk. BK Variable Internacional is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,312  in BK Variable Internacional on October 12, 2024 and sell it today you would earn a total of  457.00  from holding BK Variable Internacional or generate 34.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.81%
Values	Daily Returns

Indexa Ms Rentabilidad  vs.  BK Variable Internacional

Indexa Ms Rentabilidad

Risk-Adjusted Performance

0 of 100

Very Weak

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

BK Variable Internacional

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BK Variable Internacional are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, BK Variable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Indexa Ms and BK Variable

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

The idea behind Indexa Ms Rentabilidad and BK Variable Internacional 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.