Correlation Between Bolsa Mexicana and Textron
Can any of the company-specific risk be diversified away by investing in both Bolsa Mexicana and Textron 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 Bolsa Mexicana and Textron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bolsa Mexicana de and Textron, you can compare the effects of market volatilities on Bolsa Mexicana and Textron 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 Bolsa Mexicana with a short position of Textron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bolsa Mexicana and Textron.
Diversification Opportunities for Bolsa Mexicana and Textron
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bolsa and Textron is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bolsa Mexicana de and Textron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Textron and Bolsa Mexicana 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 Bolsa Mexicana de are associated (or correlated) with Textron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Textron has no effect on the direction of Bolsa Mexicana i.e., Bolsa Mexicana and Textron go up and down completely randomly.
Pair Corralation between Bolsa Mexicana and Textron
Assuming the 90 days trading horizon Bolsa Mexicana de is expected to generate 495.59 times more return on investment than Textron. However, Bolsa Mexicana is 495.59 times more volatile than Textron. It trades about 0.03 of its potential returns per unit of risk. Textron is currently generating about 0.22 per unit of risk. If you would invest 3,360 in Bolsa Mexicana de on September 24, 2024 and sell it today you would earn a total of 34.00 from holding Bolsa Mexicana de or generate 1.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bolsa Mexicana de vs. Textron
Performance |
Timeline |
Bolsa Mexicana de |
Textron |
Bolsa Mexicana and Textron Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bolsa Mexicana and Textron
The main advantage of trading using opposite Bolsa Mexicana and Textron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bolsa Mexicana position performs unexpectedly, Textron 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 Textron will offset losses from the drop in Textron's long position.Bolsa Mexicana vs. Samsung Electronics Co | Bolsa Mexicana vs. Taiwan Semiconductor Manufacturing | Bolsa Mexicana vs. JPMorgan Chase Co | Bolsa Mexicana vs. Bank of America |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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