Correlation Between MercadoLibre and ODP
Can any of the company-specific risk be diversified away by investing in both MercadoLibre and ODP 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 MercadoLibre and ODP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MercadoLibre and The ODP, you can compare the effects of market volatilities on MercadoLibre and ODP 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 MercadoLibre with a short position of ODP. Check out your portfolio center. Please also check ongoing floating volatility patterns of MercadoLibre and ODP.
Diversification Opportunities for MercadoLibre and ODP
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MercadoLibre and ODP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MercadoLibre and The ODP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODP and MercadoLibre 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 MercadoLibre are associated (or correlated) with ODP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODP has no effect on the direction of MercadoLibre i.e., MercadoLibre and ODP go up and down completely randomly.
Pair Corralation between MercadoLibre and ODP
If you would invest 2,686,001 in MercadoLibre on August 25, 2024 and sell it today you would earn a total of 1,410,568 from holding MercadoLibre or generate 52.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.56% |
| Values | Daily Returns |
MercadoLibre vs. The ODP
Performance |
| Timeline |
| MercadoLibre |
| ODP |
MercadoLibre and ODP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MercadoLibre and ODP
The main advantage of trading using opposite MercadoLibre and ODP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MercadoLibre position performs unexpectedly, ODP 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 ODP will offset losses from the drop in ODP's long position.| MercadoLibre vs. Hoteles City Express | MercadoLibre vs. Southwest Airlines | MercadoLibre vs. The Bank of | MercadoLibre vs. Genworth Financial |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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