Correlation Between Bolsas Y and Compania

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

By analyzing existing cross correlation between Bolsas y Mercados and Compania de Transporte, you can compare the effects of market volatilities on Bolsas Y and Compania 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 Bolsas Y with a short position of Compania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bolsas Y and Compania.

Diversification Opportunities for Bolsas Y and Compania

-0.49

Correlation Coefficient

Bolsas Y  Compania

Very good diversification

The 3 months correlation between Bolsas and Compania is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bolsas y Mercados and Compania de Transporte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania de Transporte and Bolsas Y 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 Bolsas y Mercados are associated (or correlated) with Compania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania de Transporte has no effect on the direction of Bolsas Y i.e., Bolsas Y and Compania go up and down completely randomly.

Pair Corralation between Bolsas Y and Compania

Assuming the 90 days trading horizon Bolsas y Mercados is expected to under-perform the Compania. In addition to that, Bolsas Y is 1.74 times more volatile than Compania de Transporte. It trades about -0.12 of its total potential returns per unit of risk. Compania de Transporte is currently generating about 0.1 per unit of volatility. If you would invest  196,000  in Compania de Transporte on April 20, 2025 and sell it today you would earn a total of  42,500  from holding Compania de Transporte or generate 21.68% return on investment over 90 days.

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

Bolsas y Mercados  vs.  Compania de Transporte

Bolsas y Mercados

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bolsas y Mercados 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 August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Compania de Transporte

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compania de Transporte are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Compania sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bolsas Y and Compania

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

The idea behind Bolsas y Mercados and Compania de Transporte 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.