Correlation Between FIBRA Storage and Nemak S

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

By analyzing existing cross correlation between FIBRA Storage and Nemak S A, you can compare the effects of market volatilities on FIBRA Storage and Nemak S 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 Storage with a short position of Nemak S. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIBRA Storage and Nemak S.

Diversification Opportunities for FIBRA Storage and Nemak S

-0.42

Correlation Coefficient

FIBRA Storage  Nemak S

Very good diversification

The 3 months correlation between FIBRA and Nemak is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding FIBRA Storage and Nemak S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nemak S A and FIBRA Storage 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 Storage are associated (or correlated) with Nemak S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nemak S A has no effect on the direction of FIBRA Storage i.e., FIBRA Storage and Nemak S go up and down completely randomly.

Pair Corralation between FIBRA Storage and Nemak S

Assuming the 90 days trading horizon FIBRA Storage is expected to generate 0.53 times more return on investment than Nemak S. However, FIBRA Storage is 1.89 times less risky than Nemak S. It trades about 0.19 of its potential returns per unit of risk. Nemak S A is currently generating about -0.04 per unit of risk. If you would invest  1,530  in FIBRA Storage on September 4, 2024 and sell it today you would earn a total of  252.00  from holding FIBRA Storage or generate 16.47% return on investment over 90 days.

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

FIBRA Storage  vs.  Nemak S A

FIBRA Storage

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Storage are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, FIBRA Storage exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nemak S A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nemak S A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with FIBRA Storage and Nemak S

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

The idea behind FIBRA Storage and Nemak S A 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.