Correlation Between MBI Administradora and Weg ADM
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By analyzing existing cross correlation between MBI Administradora General and Weg ADM General, you can compare the effects of market volatilities on MBI Administradora and Weg ADM 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 MBI Administradora with a short position of Weg ADM. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBI Administradora and Weg ADM.
Diversification Opportunities for MBI Administradora and Weg ADM
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MBI and Weg is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MBI Administradora General and Weg ADM General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weg ADM General and MBI Administradora 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 MBI Administradora General are associated (or correlated) with Weg ADM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weg ADM General has no effect on the direction of MBI Administradora i.e., MBI Administradora and Weg ADM go up and down completely randomly.
Pair Corralation between MBI Administradora and Weg ADM
Assuming the 90 days trading horizon MBI Administradora General is expected to generate 1.92 times more return on investment than Weg ADM. However, MBI Administradora is 1.92 times more volatile than Weg ADM General. It trades about 0.23 of its potential returns per unit of risk. Weg ADM General is currently generating about -0.18 per unit of risk. If you would invest 2,467,984 in MBI Administradora General on August 28, 2024 and sell it today you would earn a total of 167,020 from holding MBI Administradora General or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MBI Administradora General vs. Weg ADM General
Performance |
| Timeline |
| MBI Administradora |
| Weg ADM General |
MBI Administradora and Weg ADM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBI Administradora and Weg ADM
The main advantage of trading using opposite MBI Administradora and Weg ADM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBI Administradora position performs unexpectedly, Weg ADM 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 Weg ADM will offset losses from the drop in Weg ADM's long position.| MBI Administradora vs. BTG Pactual Chile | MBI Administradora vs. HMC SA ADMINISTRADORA | MBI Administradora vs. Weg ADM General |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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