Correlation Between FIBRA Macquarie and FIBRA Prologis

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

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

Diversification Opportunities for FIBRA Macquarie and FIBRA Prologis

0.86

Correlation Coefficient

FIBRA Macquarie  FIBRA Prologis

Very poor diversification

The 3 months correlation between FIBRA and FIBRA is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding FIBRA Macquarie Mxico and FIBRA Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Prologis and FIBRA Macquarie 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 FIBRA Macquarie Mxico are associated (or correlated) with FIBRA Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBRA Prologis has no effect on the direction of FIBRA Macquarie i.e., FIBRA Macquarie and FIBRA Prologis go up and down completely randomly.

Pair Corralation between FIBRA Macquarie and FIBRA Prologis

Assuming the 90 days trading horizon FIBRA Macquarie is expected to generate 4.75 times less return on investment than FIBRA Prologis. But when comparing it to its historical volatility, FIBRA Macquarie Mxico is 1.48 times less risky than FIBRA Prologis. It trades about 0.03 of its potential returns per unit of risk. FIBRA Prologis is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  5,757  in FIBRA Prologis on December 25, 2024 and sell it today you would earn a total of  812.00  from holding FIBRA Prologis or generate 14.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

FIBRA Macquarie Mxico  vs.  FIBRA Prologis

FIBRA Macquarie Mxico

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Macquarie Mxico are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable primary indicators, FIBRA Macquarie is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

FIBRA Prologis

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Prologis are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, FIBRA Prologis disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FIBRA Macquarie and FIBRA Prologis

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

The idea behind FIBRA Macquarie Mxico and FIBRA Prologis 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.