Correlation Between Astar and MBI Administradora

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

By analyzing existing cross correlation between Astar and MBI Administradora General, you can compare the effects of market volatilities on Astar and MBI Administradora 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 Astar with a short position of MBI Administradora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and MBI Administradora.

Diversification Opportunities for Astar and MBI Administradora

0.34

Correlation Coefficient

Astar  MBI Administradora

Weak diversification

The 3 months correlation between Astar and MBI is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Astar and MBI Administradora General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBI Administradora and Astar 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 Astar are associated (or correlated) with MBI Administradora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBI Administradora has no effect on the direction of Astar i.e., Astar and MBI Administradora go up and down completely randomly.

Pair Corralation between Astar and MBI Administradora

If you would invest  2,635,004  in MBI Administradora General on October 25, 2024 and sell it today you would earn a total of  0.00  from holding MBI Administradora General or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Astar  vs.  MBI Administradora General

Astar

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MBI Administradora

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MBI Administradora General are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively fragile basic indicators, MBI Administradora may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Astar and MBI Administradora

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

The idea behind Astar and MBI Administradora General 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.