Correlation Between America Movil and SwissCom

Can any of the company-specific risk be diversified away by investing in both America Movil and SwissCom 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 SwissCom 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 SwissCom AG, you can compare the effects of market volatilities on America Movil and SwissCom 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 SwissCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of America Movil and SwissCom.

Diversification Opportunities for America Movil and SwissCom

0.24

Correlation Coefficient

America Movil  SwissCom

Modest diversification

The 3 months correlation between America and SwissCom is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding America Movil SAB and SwissCom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SwissCom AG 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 SwissCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SwissCom AG has no effect on the direction of America Movil i.e., America Movil and SwissCom go up and down completely randomly.

Pair Corralation between America Movil and SwissCom

Considering the 90-day investment horizon America Movil is expected to generate 7.27 times less return on investment than SwissCom. In addition to that, America Movil is 1.5 times more volatile than SwissCom AG. It trades about 0.01 of its total potential returns per unit of risk. SwissCom AG is currently generating about 0.12 per unit of volatility. If you would invest  5,590  in SwissCom AG on December 21, 2024 and sell it today you would earn a total of  391.00  from holding SwissCom AG or generate 6.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

America Movil SAB  vs.  SwissCom AG

America Movil SAB

Risk-Adjusted Performance

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.

SwissCom AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SwissCom AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, SwissCom may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with America Movil and SwissCom

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

The idea behind America Movil SAB and SwissCom AG 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.