Correlation Between Financiera Independencia and Unifin Financiera

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

By analyzing existing cross correlation between Financiera Independencia SAB and Unifin Financiera S, you can compare the effects of market volatilities on Financiera Independencia and Unifin Financiera 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 Financiera Independencia with a short position of Unifin Financiera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financiera Independencia and Unifin Financiera.

Diversification Opportunities for Financiera Independencia and Unifin Financiera

0.0

Correlation Coefficient

Financiera Independencia  Unifin Financiera

Pay attention - limited upside

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

Pair Corralation between Financiera Independencia and Unifin Financiera

Assuming the 90 days trading horizon Financiera Independencia is expected to generate 298.07 times less return on investment than Unifin Financiera. But when comparing it to its historical volatility, Financiera Independencia SAB is 36.27 times less risky than Unifin Financiera. It trades about 0.01 of its potential returns per unit of risk. Unifin Financiera S is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Unifin Financiera S on September 24, 2024 and sell it today you would earn a total of  1,080  from holding Unifin Financiera S or generate 900.0% return on investment over 90 days.

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

Financiera Independencia SAB  vs.  Unifin Financiera S

Financiera Independencia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Financiera Independencia SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Unifin Financiera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unifin Financiera S has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Unifin Financiera is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Financiera Independencia and Unifin Financiera

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

The idea behind Financiera Independencia SAB and Unifin Financiera S 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.