Correlation Between America Movil and Telephone

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

By analyzing existing cross correlation between America Movil SAB and Telephone and Data, you can compare the effects of market volatilities on America Movil and Telephone 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 Telephone. Check out your portfolio center. Please also check ongoing floating volatility patterns of America Movil and Telephone.

Diversification Opportunities for America Movil and Telephone

-0.64

Correlation Coefficient

America Movil  Telephone

Excellent diversification

The 3 months correlation between America and Telephone is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding America Movil SAB and Telephone and Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telephone and Data 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 America Movil SAB are associated (or correlated) with Telephone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telephone and Data has no effect on the direction of America Movil i.e., America Movil and Telephone go up and down completely randomly.

Pair Corralation between America Movil and Telephone

Considering the 90-day investment horizon America Movil SAB is expected to generate 0.62 times more return on investment than Telephone. However, America Movil SAB is 1.62 times less risky than Telephone. It trades about 0.1 of its potential returns per unit of risk. Telephone and Data is currently generating about -0.12 per unit of risk. If you would invest  1,862  in America Movil SAB on February 4, 2024 and sell it today you would earn a total of  72.00  from holding America Movil SAB or generate 3.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

America Movil SAB  vs.  Telephone and Data

America Movil SAB

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in America Movil SAB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, America Movil may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Telephone and Data

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telephone and Data has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with America Movil and Telephone

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

The idea behind America Movil SAB and Telephone and Data 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.