Correlation Between IPC MEXICO and FibroGen
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO and FibroGen 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 IPC MEXICO and FibroGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPC MEXICO and FibroGen, you can compare the effects of market volatilities on IPC MEXICO and FibroGen 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 IPC MEXICO with a short position of FibroGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and FibroGen.
Diversification Opportunities for IPC MEXICO and FibroGen
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IPC and FibroGen is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and FibroGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibroGen and IPC MEXICO 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 IPC MEXICO are associated (or correlated) with FibroGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibroGen has no effect on the direction of IPC MEXICO i.e., IPC MEXICO and FibroGen go up and down completely randomly.
Pair Corralation between IPC MEXICO and FibroGen
Assuming the 90 days trading horizon IPC MEXICO is expected to generate 0.09 times more return on investment than FibroGen. However, IPC MEXICO is 10.7 times less risky than FibroGen. It trades about -0.02 of its potential returns per unit of risk. FibroGen is currently generating about -0.03 per unit of risk. If you would invest 5,433,818 in IPC MEXICO on August 31, 2024 and sell it today you would lose (462,834) from holding IPC MEXICO or give up 8.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.14% |
| Values | Daily Returns |
IPC MEXICO vs. FibroGen
Performance |
| Timeline |
IPC MEXICO and FibroGen Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
FibroGen
Pair trading matchups for FibroGen
Pair Trading with IPC MEXICO and FibroGen
The main advantage of trading using opposite IPC MEXICO and FibroGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO position performs unexpectedly, FibroGen 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 FibroGen will offset losses from the drop in FibroGen's long position.| IPC MEXICO vs. Genworth Financial | IPC MEXICO vs. Cognizant Technology Solutions | IPC MEXICO vs. CVS Health | IPC MEXICO vs. First Republic Bank |
| FibroGen vs. Monster Beverage Corp | FibroGen vs. GMxico Transportes SAB | FibroGen vs. The Bank of | FibroGen vs. Verizon Communications |
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 CEOs Directory module to screen CEOs from public companies around the world.
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