Correlation Between SP Merval and MercadoLibre
Can any of the company-specific risk be diversified away by investing in both SP Merval 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 SP Merval and MercadoLibre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Merval and MercadoLibre, you can compare the effects of market volatilities on SP Merval 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 SP Merval with a short position of MercadoLibre. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Merval and MercadoLibre.
Diversification Opportunities for SP Merval and MercadoLibre
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MERV and MercadoLibre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SP Merval and MercadoLibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MercadoLibre and SP Merval 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 SP Merval 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 SP Merval i.e., SP Merval and MercadoLibre go up and down completely randomly.
Pair Corralation between SP Merval and MercadoLibre
If you would invest 100,000,000 in SP Merval on September 19, 2024 and sell it today you would earn a total of 0.00 from holding SP Merval or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Merval vs. MercadoLibre
Performance |
| Timeline |
SP Merval and MercadoLibre Volatility Contrast
Predicted Return Density |
| Returns |
SP Merval
Pair trading matchups for SP Merval
MercadoLibre
Pair trading matchups for MercadoLibre
Pair Trading with SP Merval and MercadoLibre
The main advantage of trading using opposite SP Merval and MercadoLibre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Merval 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.| SP Merval vs. United States Steel | SP Merval vs. Agrometal SAI | SP Merval vs. Transportadora de Gas | SP Merval vs. Harmony Gold Mining |
| MercadoLibre vs. Harmony Gold Mining | MercadoLibre vs. Agrometal SAI | MercadoLibre vs. Telecom Argentina | MercadoLibre vs. Compania de Transporte |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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