Correlation Between Bolsa Mexicana and London Stock
Can any of the company-specific risk be diversified away by investing in both Bolsa Mexicana and London Stock 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 London Stock 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 London Stock Exchange, you can compare the effects of market volatilities on Bolsa Mexicana and London Stock 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 London Stock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bolsa Mexicana and London Stock.
Diversification Opportunities for Bolsa Mexicana and London Stock
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bolsa and London is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bolsa Mexicana de and London Stock Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on London Stock Exchange 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 London Stock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of London Stock Exchange has no effect on the direction of Bolsa Mexicana i.e., Bolsa Mexicana and London Stock go up and down completely randomly.
Pair Corralation between Bolsa Mexicana and London Stock
Assuming the 90 days trading horizon Bolsa Mexicana de is expected to generate 2.89 times more return on investment than London Stock. However, Bolsa Mexicana is 2.89 times more volatile than London Stock Exchange. It trades about 0.03 of its potential returns per unit of risk. London Stock Exchange 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bolsa Mexicana de vs. London Stock Exchange
Performance |
| Timeline |
| Bolsa Mexicana de |
| London Stock Exchange |
Bolsa Mexicana and London Stock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bolsa Mexicana and London Stock
The main advantage of trading using opposite Bolsa Mexicana and London Stock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bolsa Mexicana position performs unexpectedly, London Stock 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 London Stock will offset losses from the drop in London Stock'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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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