Correlation Between America Movil and Cibl

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

By analyzing existing cross correlation between America Movil SAB and Cibl Inc, you can compare the effects of market volatilities on America Movil and Cibl 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 America Movil with a short position of Cibl. Check out your portfolio center. Please also check ongoing floating volatility patterns of America Movil and Cibl.

Diversification Opportunities for America Movil and Cibl

-0.4

Correlation Coefficient

America Movil  Cibl

Very good diversification

The 3 months correlation between America and Cibl is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding America Movil SAB and Cibl Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibl Inc and America Movil 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 America Movil SAB are associated (or correlated) with Cibl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibl Inc has no effect on the direction of America Movil i.e., America Movil and Cibl go up and down completely randomly.

Pair Corralation between America Movil and Cibl

Considering the 90-day investment horizon America Movil SAB is expected to generate 0.75 times more return on investment than Cibl. However, America Movil SAB is 1.33 times less risky than Cibl. It trades about 0.01 of its potential returns per unit of risk. Cibl Inc is currently generating about -0.04 per unit of risk. If you would invest  1,451  in America Movil SAB on December 27, 2024 and sell it today you would lose (3.00) from holding America Movil SAB or give up 0.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

America Movil SAB  vs.  Cibl Inc

America Movil SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days America Movil SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, America Movil is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Cibl Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cibl Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Cibl is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with America Movil and Cibl

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

The idea behind America Movil SAB and Cibl Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .