Correlation Between IShares NAFTRAC and Corporacin Actinver

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

By analyzing existing cross correlation between iShares NAFTRAC and Corporacin Actinver S, you can compare the effects of market volatilities on IShares NAFTRAC and Corporacin Actinver 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 IShares NAFTRAC with a short position of Corporacin Actinver. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares NAFTRAC and Corporacin Actinver.

Diversification Opportunities for IShares NAFTRAC and Corporacin Actinver

-0.64

Correlation Coefficient

IShares NAFTRAC  Corporacin Actinver

Excellent diversification

The 3 months correlation between IShares and Corporacin is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares NAFTRAC and Corporacin Actinver S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacin Actinver and IShares NAFTRAC 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 iShares NAFTRAC are associated (or correlated) with Corporacin Actinver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacin Actinver has no effect on the direction of IShares NAFTRAC i.e., IShares NAFTRAC and Corporacin Actinver go up and down completely randomly.

Pair Corralation between IShares NAFTRAC and Corporacin Actinver

Assuming the 90 days trading horizon iShares NAFTRAC is expected to under-perform the Corporacin Actinver. But the etf apears to be less risky and, when comparing its historical volatility, iShares NAFTRAC is 1.99 times less risky than Corporacin Actinver. The etf trades about -0.09 of its potential returns per unit of risk. The Corporacin Actinver S is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,625  in Corporacin Actinver S on October 11, 2024 and sell it today you would earn a total of  135.00  from holding Corporacin Actinver S or generate 8.31% return on investment over 90 days.

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

iShares NAFTRAC  vs.  Corporacin Actinver S

iShares NAFTRAC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares NAFTRAC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, IShares NAFTRAC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Corporacin Actinver

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Corporacin Actinver S are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Corporacin Actinver may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with IShares NAFTRAC and Corporacin Actinver

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

The idea behind iShares NAFTRAC and Corporacin Actinver S 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..