Methanex Non Current Assets Total vs Common Stock Shares Outstanding Analysis
Pair Trading with Methanex
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Methanex position performs unexpectedly, the other equity 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 Methanex will appreciate offsetting losses from the drop in the long position's value.Moving against Methanex Stock
The ability to find closely correlated positions to Methanex could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Methanex when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Methanex - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Methanex to buy it.
The correlation of Methanex is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Methanex moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Methanex moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Methanex can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out Correlation Analysis to better understand how to build diversified portfolios, which includes a position in Methanex. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in estimate. To learn how to invest in Methanex Stock, please use our How to Invest in Methanex guide.You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.