Correlation Between Sociedad Matriz and MBI Administradora

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

By analyzing existing cross correlation between Sociedad Matriz SAAM and MBI Administradora General, you can compare the effects of market volatilities on Sociedad Matriz and MBI Administradora 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 Sociedad Matriz with a short position of MBI Administradora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sociedad Matriz and MBI Administradora.

Diversification Opportunities for Sociedad Matriz and MBI Administradora

-0.26

Correlation Coefficient

Sociedad Matriz  MBI Administradora

Very good diversification

The 3 months correlation between Sociedad and MBI is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sociedad Matriz SAAM and MBI Administradora General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBI Administradora and Sociedad Matriz 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 Sociedad Matriz SAAM are associated (or correlated) with MBI Administradora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBI Administradora has no effect on the direction of Sociedad Matriz i.e., Sociedad Matriz and MBI Administradora go up and down completely randomly.

Pair Corralation between Sociedad Matriz and MBI Administradora

Assuming the 90 days trading horizon Sociedad Matriz SAAM is expected to generate 0.3 times more return on investment than MBI Administradora. However, Sociedad Matriz SAAM is 3.37 times less risky than MBI Administradora. It trades about 0.21 of its potential returns per unit of risk. MBI Administradora General is currently generating about -0.05 per unit of risk. If you would invest  10,400  in Sociedad Matriz SAAM on December 26, 2024 and sell it today you would earn a total of  992.00  from holding Sociedad Matriz SAAM or generate 9.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Sociedad Matriz SAAM  vs.  MBI Administradora General

Sociedad Matriz SAAM

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sociedad Matriz SAAM are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Sociedad Matriz may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MBI Administradora

Risk-Adjusted Performance

Very Weak

Over the last 90 days MBI Administradora General has generated negative risk-adjusted returns adding no value to fund investors. Even with latest fragile performance, the Fund's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.

Pair Trading with Sociedad Matriz and MBI Administradora

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

The idea behind Sociedad Matriz SAAM and MBI Administradora General 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.