Correlation Between Mapfre and Indexa Ms

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

By analyzing existing cross correlation between Mapfre and Indexa Ms Rentabilidad, you can compare the effects of market volatilities on Mapfre and Indexa Ms 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 Mapfre with a short position of Indexa Ms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre and Indexa Ms.

Diversification Opportunities for Mapfre and Indexa Ms

-0.23

Correlation Coefficient

Mapfre  Indexa Ms

Very good diversification

The 3 months correlation between Mapfre and Indexa is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre and Indexa Ms Rentabilidad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indexa Ms Rentabilidad and Mapfre 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 Mapfre are associated (or correlated) with Indexa Ms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indexa Ms Rentabilidad has no effect on the direction of Mapfre i.e., Mapfre and Indexa Ms go up and down completely randomly.

Pair Corralation between Mapfre and Indexa Ms

Assuming the 90 days trading horizon Mapfre is expected to generate 3.43 times more return on investment than Indexa Ms. However, Mapfre is 3.43 times more volatile than Indexa Ms Rentabilidad. It trades about 0.08 of its potential returns per unit of risk. Indexa Ms Rentabilidad is currently generating about 0.02 per unit of risk. If you would invest  167.00  in Mapfre on October 12, 2024 and sell it today you would earn a total of  88.00  from holding Mapfre or generate 52.69% return on investment over 90 days.

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

Mapfre  vs.  Indexa Ms Rentabilidad

Mapfre

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mapfre are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Mapfre is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Indexa Ms Rentabilidad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indexa Ms Rentabilidad has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Indexa Ms is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mapfre and Indexa Ms

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

The idea behind Mapfre and Indexa Ms Rentabilidad 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.