Correlation Between FIBRA Prologis and Fibra Shop

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

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

Diversification Opportunities for FIBRA Prologis and Fibra Shop

-0.71

Correlation Coefficient

FIBRA Prologis  Fibra Shop

Pay attention - limited upside

The 3 months correlation between FIBRA and Fibra is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding FIBRA Prologis and Fibra Shop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fibra Shop and FIBRA Prologis 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 Prologis are associated (or correlated) with Fibra Shop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fibra Shop has no effect on the direction of FIBRA Prologis i.e., FIBRA Prologis and Fibra Shop go up and down completely randomly.

Pair Corralation between FIBRA Prologis and Fibra Shop

Assuming the 90 days trading horizon FIBRA Prologis is expected to generate 3.23 times less return on investment than Fibra Shop. In addition to that, FIBRA Prologis is 1.2 times more volatile than Fibra Shop. It trades about 0.02 of its total potential returns per unit of risk. Fibra Shop is currently generating about 0.07 per unit of volatility. If you would invest  546.00  in Fibra Shop on October 26, 2024 and sell it today you would earn a total of  319.00  from holding Fibra Shop or generate 58.42% return on investment over 90 days.

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

FIBRA Prologis  vs.  Fibra Shop

FIBRA Prologis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIBRA Prologis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Fibra Shop

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fibra Shop are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fibra Shop may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FIBRA Prologis and Fibra Shop

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

The idea behind FIBRA Prologis and Fibra Shop 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.