Correlation Between Bolsa Mexicana and ASX
Can any of the company-specific risk be diversified away by investing in both Bolsa Mexicana and ASX 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 Bolsa Mexicana and ASX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bolsa Mexicana de and ASX Limited, you can compare the effects of market volatilities on Bolsa Mexicana and ASX 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 Bolsa Mexicana with a short position of ASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bolsa Mexicana and ASX.
Diversification Opportunities for Bolsa Mexicana and ASX
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bolsa and ASX is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bolsa Mexicana de and ASX Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASX Limited and Bolsa Mexicana 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 Bolsa Mexicana de are associated (or correlated) with ASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASX Limited has no effect on the direction of Bolsa Mexicana i.e., Bolsa Mexicana and ASX go up and down completely randomly.
Pair Corralation between Bolsa Mexicana and ASX
Assuming the 90 days trading horizon Bolsa Mexicana de is expected to generate 3.02 times more return on investment than ASX. However, Bolsa Mexicana is 3.02 times more volatile than ASX Limited. It trades about 0.03 of its potential returns per unit of risk. ASX Limited is currently generating about 0.05 per unit of risk. If you would invest 146.00 in Bolsa Mexicana de on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Bolsa Mexicana de or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bolsa Mexicana de vs. ASX Limited
Performance |
| Timeline |
| Bolsa Mexicana de |
| ASX Limited |
Bolsa Mexicana and ASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bolsa Mexicana and ASX
The main advantage of trading using opposite Bolsa Mexicana and ASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bolsa Mexicana position performs unexpectedly, ASX 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 ASX will offset losses from the drop in ASX's long position.| Bolsa Mexicana vs. CME Group | Bolsa Mexicana vs. Intercontinental Exchange | Bolsa Mexicana vs. Hong Kong Exchanges | Bolsa Mexicana vs. London Stock Exchange |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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