Correlation Between Fibra Terrafina and Fibra Mty

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

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

Diversification Opportunities for Fibra Terrafina and Fibra Mty

0.0

Correlation Coefficient

Fibra Terrafina  Fibra Mty

Pay attention - limited upside

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

Pair Corralation between Fibra Terrafina and Fibra Mty

Assuming the 90 days trading horizon Fibra Terrafina is expected to under-perform the Fibra Mty. In addition to that, Fibra Terrafina is 1.98 times more volatile than Fibra Mty SAPI. It trades about -0.01 of its total potential returns per unit of risk. Fibra Mty SAPI is currently generating about 0.18 per unit of volatility. If you would invest  1,056  in Fibra Mty SAPI on December 23, 2024 and sell it today you would earn a total of  143.00  from holding Fibra Mty SAPI or generate 13.54% return on investment over 90 days.

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

Fibra Terrafina  vs.  Fibra Mty SAPI

Fibra Terrafina

Risk-Adjusted Performance

Very Weak

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

Fibra Mty SAPI

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fibra Mty SAPI are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fibra Mty sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fibra Terrafina and Fibra Mty

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

The idea behind Fibra Terrafina and Fibra Mty SAPI 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.