Correlation Between America Movil and Bio Meat

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

By analyzing existing cross correlation between Automax Motors and Bio Meat Foodtech, you can compare the effects of market volatilities on America Movil and Bio Meat 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 America Movil with a short position of Bio Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of America Movil and Bio Meat.

Diversification Opportunities for America Movil and Bio Meat

-0.2

Correlation Coefficient

America Movil  Bio Meat

Good diversification

The 3 months correlation between America and Bio is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Automax Motors and Bio Meat Foodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Meat Foodtech and America Movil 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 Automax Motors are associated (or correlated) with Bio Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Meat Foodtech has no effect on the direction of America Movil i.e., America Movil and Bio Meat go up and down completely randomly.

Pair Corralation between America Movil and Bio Meat

Assuming the 90 days trading horizon Automax Motors is expected to under-perform the Bio Meat. In addition to that, America Movil is 1.07 times more volatile than Bio Meat Foodtech. It trades about -0.36 of its total potential returns per unit of risk. Bio Meat Foodtech is currently generating about -0.06 per unit of volatility. If you would invest  2,180  in Bio Meat Foodtech on September 5, 2024 and sell it today you would lose (90.00) from holding Bio Meat Foodtech or give up 4.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Automax Motors  vs.  Bio Meat Foodtech

Automax Motors

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Automax Motors are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, America Movil is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bio Meat Foodtech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio Meat Foodtech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with America Movil and Bio Meat

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

The idea behind Automax Motors and Bio Meat Foodtech 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 Anywhere module to track or share privately all of your investments from the convenience of any device.