Correlation Between Turism Felix and Mecanica

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

By analyzing existing cross correlation between Turism Felix B and Mecanica Sa Ce, you can compare the effects of market volatilities on Turism Felix and Mecanica 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 Turism Felix with a short position of Mecanica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turism Felix and Mecanica.

Diversification Opportunities for Turism Felix and Mecanica

0.04

Correlation Coefficient

Turism Felix  Mecanica

Significant diversification

The 3 months correlation between Turism and Mecanica is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Turism Felix B and Mecanica Sa Ce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mecanica Sa Ce and Turism Felix 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 Turism Felix B are associated (or correlated) with Mecanica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mecanica Sa Ce has no effect on the direction of Turism Felix i.e., Turism Felix and Mecanica go up and down completely randomly.

Pair Corralation between Turism Felix and Mecanica

Assuming the 90 days trading horizon Turism Felix B is expected to generate 0.74 times more return on investment than Mecanica. However, Turism Felix B is 1.34 times less risky than Mecanica. It trades about 0.08 of its potential returns per unit of risk. Mecanica Sa Ce is currently generating about -0.02 per unit of risk. If you would invest  30.00  in Turism Felix B on September 1, 2024 and sell it today you would earn a total of  4.00  from holding Turism Felix B or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Turism Felix B  vs.  Mecanica Sa Ce

Turism Felix B

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Turism Felix B are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Turism Felix displayed solid returns over the last few months and may actually be approaching a breakup point.

Mecanica Sa Ce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mecanica Sa Ce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Mecanica is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Turism Felix and Mecanica

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

The idea behind Turism Felix B and Mecanica Sa Ce 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.