Correlation Between Ancora Microcap and Mexico Equity

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

By analyzing existing cross correlation between Ancora Microcap Fund and Mexico Equity And, you can compare the effects of market volatilities on Ancora Microcap and Mexico Equity 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 Ancora Microcap with a short position of Mexico Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ancora Microcap and Mexico Equity.

Diversification Opportunities for Ancora Microcap and Mexico Equity

-0.36

Correlation Coefficient

Ancora Microcap  Mexico Equity

Very good diversification

The 3 months correlation between Ancora and Mexico is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ancora Microcap Fund and Mexico Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexico Equity And and Ancora Microcap 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 Ancora Microcap Fund are associated (or correlated) with Mexico Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexico Equity And has no effect on the direction of Ancora Microcap i.e., Ancora Microcap and Mexico Equity go up and down completely randomly.

Pair Corralation between Ancora Microcap and Mexico Equity

Assuming the 90 days horizon Ancora Microcap Fund is expected to under-perform the Mexico Equity. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ancora Microcap Fund is 1.34 times less risky than Mexico Equity. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Mexico Equity And is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  805.00  in Mexico Equity And on December 29, 2024 and sell it today you would earn a total of  66.00  from holding Mexico Equity And or generate 8.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ancora Microcap Fund  vs.  Mexico Equity And

Ancora Microcap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ancora Microcap Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Ancora Microcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mexico Equity And

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mexico Equity And are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather fragile basic indicators, Mexico Equity may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ancora Microcap and Mexico Equity

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

The idea behind Ancora Microcap Fund and Mexico Equity And 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.