Correlation Between Fibra Shop and FIBRA Prologis

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

Diversification Opportunities for Fibra Shop and FIBRA Prologis

0.25

Correlation Coefficient

Fibra Shop  FIBRA Prologis

Modest diversification

The 3 months correlation between Fibra and FIBRA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fibra Shop and FIBRA Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Prologis and Fibra Shop 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 Shop 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 Shop i.e., Fibra Shop and FIBRA Prologis go up and down completely randomly.

Pair Corralation between Fibra Shop and FIBRA Prologis

Assuming the 90 days trading horizon Fibra Shop is expected to generate 1.22 times less return on investment than FIBRA Prologis. But when comparing it to its historical volatility, Fibra Shop is 1.27 times less risky than FIBRA Prologis. It trades about 0.1 of its potential returns per unit of risk. FIBRA Prologis is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,830  in FIBRA Prologis on December 24, 2024 and sell it today you would earn a total of  688.00  from holding FIBRA Prologis or generate 11.8% return on investment over 90 days.

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

Fibra Shop  vs.  FIBRA Prologis

Fibra Shop

Risk-Adjusted Performance

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 April 2025.

FIBRA Prologis

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Prologis are ranked lower than 7 (%) 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 Shop and FIBRA Prologis

The main advantage of trading using opposite Fibra Shop and FIBRA Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fibra Shop 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 Shop 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.