Correlation Between Fibra Mty and Textron

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

By analyzing existing cross correlation between Fibra Mty SAPI and Textron, you can compare the effects of market volatilities on Fibra Mty and Textron 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 Mty with a short position of Textron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fibra Mty and Textron.

Diversification Opportunities for Fibra Mty and Textron

0.8

Correlation Coefficient

Fibra Mty  Textron

Very poor diversification

The 3 months correlation between Fibra and Textron is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fibra Mty SAPI and Textron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Textron and Fibra Mty 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 Mty SAPI are associated (or correlated) with Textron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Textron has no effect on the direction of Fibra Mty i.e., Fibra Mty and Textron go up and down completely randomly.

Pair Corralation between Fibra Mty and Textron

Assuming the 90 days trading horizon Fibra Mty is expected to generate 1.44 times less return on investment than Textron. But when comparing it to its historical volatility, Fibra Mty SAPI is 1.27 times less risky than Textron. It trades about 0.14 of its potential returns per unit of risk. Textron is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  128,862  in Textron on April 24, 2025 and sell it today you would earn a total of  26,362  from holding Textron or generate 20.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Fibra Mty SAPI  vs.  Textron

Fibra Mty SAPI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fibra Mty SAPI are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Fibra Mty sustained solid returns over the last few months and may actually be approaching a breakup point.

Textron

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Textron are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Textron showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fibra Mty and Textron

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

The idea behind Fibra Mty SAPI and Textron 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.