Correlation Between Fibra Mty and FIBRA Prologis

Can any of the company-specific risk be diversified away by investing in both Fibra Mty 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 Mty 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 Mty SAPI and FIBRA Prologis, you can compare the effects of market volatilities on Fibra Mty 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 Mty with a short position of FIBRA Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fibra Mty and FIBRA Prologis.

Diversification Opportunities for Fibra Mty and FIBRA Prologis

-0.54

Correlation Coefficient

Fibra Mty  FIBRA Prologis

Excellent diversification

The 3 months correlation between Fibra and FIBRA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Fibra Mty SAPI and FIBRA Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Prologis and Fibra Mty 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 Mty SAPI 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 Mty i.e., Fibra Mty and FIBRA Prologis go up and down completely randomly.

Pair Corralation between Fibra Mty and FIBRA Prologis

Assuming the 90 days trading horizon Fibra Mty SAPI is expected to generate 0.64 times more return on investment than FIBRA Prologis. However, Fibra Mty SAPI is 1.56 times less risky than FIBRA Prologis. It trades about 0.04 of its potential returns per unit of risk. FIBRA Prologis is currently generating about -0.07 per unit of risk. If you would invest  1,024  in Fibra Mty SAPI on October 26, 2024 and sell it today you would earn a total of  20.00  from holding Fibra Mty SAPI or generate 1.95% return on investment over 90 days.

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

Fibra Mty SAPI  vs.  FIBRA Prologis

Fibra Mty SAPI

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fibra Mty SAPI are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Fibra Mty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Fibra Mty and FIBRA Prologis

The main advantage of trading using opposite Fibra Mty and FIBRA Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fibra Mty 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 Mty SAPI 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.