Correlation Between MBI Administradora and HMC SA

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

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

Diversification Opportunities for MBI Administradora and HMC SA

0.0

Correlation Coefficient

MBI Administradora  HMC SA

Pay attention - limited upside

The 3 months correlation between MBI and HMC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MBI Administradora General and HMC SA ADMINISTRADORA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMC SA ADMINISTRADORA and MBI Administradora 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 MBI Administradora General are associated (or correlated) with HMC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMC SA ADMINISTRADORA has no effect on the direction of MBI Administradora i.e., MBI Administradora and HMC SA go up and down completely randomly.

Pair Corralation between MBI Administradora and HMC SA

If you would invest  2,440,231  in MBI Administradora General on September 14, 2024 and sell it today you would earn a total of  194,773  from holding MBI Administradora General or generate 7.98% return on investment over 90 days.

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

MBI Administradora General  vs.  HMC SA ADMINISTRADORA

MBI Administradora

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MBI Administradora General are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively unfluctuating basic indicators, MBI Administradora may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HMC SA ADMINISTRADORA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HMC SA ADMINISTRADORA has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, HMC SA is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MBI Administradora and HMC SA

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

The idea behind MBI Administradora General and HMC SA ADMINISTRADORA 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.