Correlation Between Fondo De and Multiexport Foods

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

By analyzing existing cross correlation between Fondo De Inversion and Multiexport Foods SA, you can compare the effects of market volatilities on Fondo De and Multiexport Foods 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 Fondo De with a short position of Multiexport Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fondo De and Multiexport Foods.

Diversification Opportunities for Fondo De and Multiexport Foods

0.93

Correlation Coefficient

Fondo De  Multiexport Foods

Almost no diversification

The 3 months correlation between Fondo and Multiexport is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fondo De Inversion and Multiexport Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multiexport Foods and Fondo De 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 Fondo De Inversion are associated (or correlated) with Multiexport Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multiexport Foods has no effect on the direction of Fondo De i.e., Fondo De and Multiexport Foods go up and down completely randomly.

Pair Corralation between Fondo De and Multiexport Foods

Assuming the 90 days trading horizon Fondo De is expected to generate 21.02 times less return on investment than Multiexport Foods. But when comparing it to its historical volatility, Fondo De Inversion is 44.73 times less risky than Multiexport Foods. It trades about 0.83 of its potential returns per unit of risk. Multiexport Foods SA is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  20,786  in Multiexport Foods SA on December 27, 2024 and sell it today you would earn a total of  5,918  from holding Multiexport Foods SA or generate 28.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	80.65%
Values	Daily Returns

Fondo De Inversion  vs.  Multiexport Foods SA

Fondo De Inversion

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Fondo De Inversion are ranked lower than 65 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Fondo De is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Multiexport Foods

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Multiexport Foods SA are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Multiexport Foods sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fondo De and Multiexport Foods

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

The idea behind Fondo De Inversion and Multiexport Foods 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.