Correlation Between COMINTL BANK and MercadoLibre
Can any of the company-specific risk be diversified away by investing in both COMINTL BANK and MercadoLibre 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 COMINTL BANK and MercadoLibre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMINTL BANK ADR1 and MercadoLibre, you can compare the effects of market volatilities on COMINTL BANK and MercadoLibre 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 COMINTL BANK with a short position of MercadoLibre. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMINTL BANK and MercadoLibre.
Diversification Opportunities for COMINTL BANK and MercadoLibre
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COMINTL and MercadoLibre is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding COMINTL BANK ADR1 and MercadoLibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MercadoLibre and COMINTL BANK 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 COMINTL BANK ADR1 are associated (or correlated) with MercadoLibre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MercadoLibre has no effect on the direction of COMINTL BANK i.e., COMINTL BANK and MercadoLibre go up and down completely randomly.
Pair Corralation between COMINTL BANK and MercadoLibre
Assuming the 90 days trading horizon COMINTL BANK ADR1 is expected to generate 0.51 times more return on investment than MercadoLibre. However, COMINTL BANK ADR1 is 1.94 times less risky than MercadoLibre. It trades about -0.1 of its potential returns per unit of risk. MercadoLibre is currently generating about -0.1 per unit of risk. If you would invest 130.00 in COMINTL BANK ADR1 on September 13, 2024 and sell it today you would lose (4.00) from holding COMINTL BANK ADR1 or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMINTL BANK ADR1 vs. MercadoLibre
Performance |
| Timeline |
| COMINTL BANK ADR1 |
| MercadoLibre |
COMINTL BANK and MercadoLibre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMINTL BANK and MercadoLibre
The main advantage of trading using opposite COMINTL BANK and MercadoLibre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMINTL BANK position performs unexpectedly, MercadoLibre 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 MercadoLibre will offset losses from the drop in MercadoLibre's long position.| COMINTL BANK vs. Superior Plus Corp | COMINTL BANK vs. SIVERS SEMICONDUCTORS AB | COMINTL BANK vs. CHINA HUARONG ENERHD 50 | COMINTL BANK vs. NORDIC HALIBUT AS |
| MercadoLibre vs. Performance Food Group | MercadoLibre vs. UMC Electronics Co | MercadoLibre vs. JJ SNACK FOODS | MercadoLibre vs. STMICROELECTRONICS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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