Correlation Between Fibra UNO and FIBRA Macquarie

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

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

Diversification Opportunities for Fibra UNO and FIBRA Macquarie

0.5

Correlation Coefficient

Fibra UNO  FIBRA Macquarie

Very weak diversification

The 3 months correlation between Fibra and FIBRA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Fibra UNO and FIBRA Macquarie Mxico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Macquarie Mxico and Fibra UNO 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 UNO are associated (or correlated) with FIBRA Macquarie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBRA Macquarie Mxico has no effect on the direction of Fibra UNO i.e., Fibra UNO and FIBRA Macquarie go up and down completely randomly.

Pair Corralation between Fibra UNO and FIBRA Macquarie

Assuming the 90 days trading horizon Fibra UNO is expected to generate 4.72 times less return on investment than FIBRA Macquarie. In addition to that, Fibra UNO is 1.29 times more volatile than FIBRA Macquarie Mxico. It trades about 0.01 of its total potential returns per unit of risk. FIBRA Macquarie Mxico is currently generating about 0.06 per unit of volatility. If you would invest  2,513  in FIBRA Macquarie Mxico on February 5, 2024 and sell it today you would earn a total of  543.00  from holding FIBRA Macquarie Mxico or generate 21.61% return on investment over 90 days.

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

Fibra UNO  vs.  FIBRA Macquarie Mxico

Fibra UNO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fibra UNO 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 June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

FIBRA Macquarie Mxico

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIBRA Macquarie Mxico has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, FIBRA Macquarie is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Fibra UNO and FIBRA Macquarie

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

The idea behind Fibra UNO and FIBRA Macquarie Mxico 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.