Correlation Between FDO INV and Metalfrio Solutions

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

By analyzing existing cross correlation between FDO INV IMOB and Metalfrio Solutions SA, you can compare the effects of market volatilities on FDO INV and Metalfrio Solutions 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 FDO INV with a short position of Metalfrio Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of FDO INV and Metalfrio Solutions.

Diversification Opportunities for FDO INV and Metalfrio Solutions

0.0

Correlation Coefficient

FDO INV  Metalfrio Solutions

Pay attention - limited upside

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

Pair Corralation between FDO INV and Metalfrio Solutions

If you would invest  2,530  in Metalfrio Solutions SA on October 23, 2024 and sell it today you would earn a total of  27,470  from holding Metalfrio Solutions SA or generate 1085.77% return on investment over 90 days.

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

FDO INV IMOB  vs.  Metalfrio Solutions SA

FDO INV IMOB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FDO INV IMOB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, FDO INV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Metalfrio Solutions

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Metalfrio Solutions SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Metalfrio Solutions unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FDO INV and Metalfrio Solutions

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

The idea behind FDO INV IMOB and Metalfrio Solutions SA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.