Correlation Between IPC MEXICO and Procorp SAB

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

By analyzing existing cross correlation between IPC MEXICO and Procorp SAB de, you can compare the effects of market volatilities on IPC MEXICO and Procorp SAB 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 IPC MEXICO with a short position of Procorp SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and Procorp SAB.

Diversification Opportunities for IPC MEXICO and Procorp SAB

0.0

Correlation Coefficient

IPC MEXICO  Procorp SAB

Pay attention - limited upside

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

Pair Corralation between IPC MEXICO and Procorp SAB

If you would invest  500.00  in Procorp SAB de on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Procorp SAB de or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

IPC MEXICO  vs.  Procorp SAB de

Pair Trading with IPC MEXICO and Procorp SAB

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

The idea behind IPC MEXICO and Procorp SAB de 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 Transaction History module to view history of all your transactions and understand their impact on performance.