Correlation Between Multiexport Foods and Fondo De

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

By analyzing existing cross correlation between Multiexport Foods SA and Fondo De Inversion, you can compare the effects of market volatilities on Multiexport Foods and Fondo De 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 Multiexport Foods with a short position of Fondo De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multiexport Foods and Fondo De.

Diversification Opportunities for Multiexport Foods and Fondo De

-0.94

Correlation Coefficient

Multiexport Foods  Fondo De

Pay attention - limited upside

The 3 months correlation between Multiexport and Fondo is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Multiexport Foods SA and Fondo De Inversion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fondo De Inversion and Multiexport Foods 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 Multiexport Foods SA are associated (or correlated) with Fondo De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fondo De Inversion has no effect on the direction of Multiexport Foods i.e., Multiexport Foods and Fondo De go up and down completely randomly.

Pair Corralation between Multiexport Foods and Fondo De

Assuming the 90 days trading horizon Multiexport Foods SA is expected to under-perform the Fondo De. In addition to that, Multiexport Foods is 7.97 times more volatile than Fondo De Inversion. It trades about -0.02 of its total potential returns per unit of risk. Fondo De Inversion is currently generating about 0.25 per unit of volatility. If you would invest  126,940  in Fondo De Inversion on June 20, 2024 and sell it today you would earn a total of  12,770  from holding Fondo De Inversion or generate 10.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	76.73%
Values	Daily Returns

Multiexport Foods SA  vs.  Fondo De Inversion

Multiexport Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Multiexport Foods SA 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 essential indicators remain somewhat strong which may send shares a bit higher in October 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Fondo De Inversion

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fondo De Inversion are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Fondo De is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Multiexport Foods and Fondo De

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

The idea behind Multiexport Foods SA and Fondo De Inversion 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.