Correlation Between Fibra Mty and Fibra UNO

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

Diversification Opportunities for Fibra Mty and Fibra UNO

-0.57

Correlation Coefficient

Fibra Mty  Fibra UNO

Excellent diversification

The 3 months correlation between Fibra and Fibra is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fibra Mty SAPI and Fibra UNO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fibra UNO 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 UNO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fibra UNO has no effect on the direction of Fibra Mty i.e., Fibra Mty and Fibra UNO go up and down completely randomly.

Pair Corralation between Fibra Mty and Fibra UNO

Assuming the 90 days trading horizon Fibra Mty SAPI is expected to generate 1.05 times more return on investment than Fibra UNO. However, Fibra Mty is 1.05 times more volatile than Fibra UNO. It trades about 0.08 of its potential returns per unit of risk. Fibra UNO is currently generating about -0.27 per unit of risk. If you would invest  1,071  in Fibra Mty SAPI on October 11, 2024 and sell it today you would earn a total of  17.00  from holding Fibra Mty SAPI or generate 1.59% 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 UNO

Fibra Mty SAPI

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fibra Mty SAPI are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fibra Mty may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Fibra UNO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fibra UNO 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Fibra Mty and Fibra UNO

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

The idea behind Fibra Mty SAPI and Fibra UNO 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..