Correlation Between HMC SA and AFP Planvital

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

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

Diversification Opportunities for HMC SA and AFP Planvital

0.0

Correlation Coefficient

HMC SA  AFP Planvital

Pay attention - limited upside

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

Pair Corralation between HMC SA and AFP Planvital

If you would invest  15,637  in AFP Planvital SA on December 2, 2024 and sell it today you would earn a total of  3,703  from holding AFP Planvital SA or generate 23.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

HMC SA ADMINISTRADORA  vs.  AFP Planvital SA

HMC SA ADMINISTRADORA

Risk-Adjusted Performance

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

AFP Planvital SA

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in AFP Planvital SA are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, AFP Planvital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HMC SA and AFP Planvital

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

The idea behind HMC SA ADMINISTRADORA and AFP Planvital SA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.