Correlation Between ODP and MercadoLibre
Can any of the company-specific risk be diversified away by investing in both ODP 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 ODP and MercadoLibre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The ODP and MercadoLibre, you can compare the effects of market volatilities on ODP 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 ODP with a short position of MercadoLibre. Check out your portfolio center. Please also check ongoing floating volatility patterns of ODP and MercadoLibre.
Diversification Opportunities for ODP and MercadoLibre
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ODP and MercadoLibre is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The ODP and MercadoLibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MercadoLibre and ODP 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 The ODP 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 ODP i.e., ODP and MercadoLibre go up and down completely randomly.
Pair Corralation between ODP and MercadoLibre
If you would invest 4,145,860 in MercadoLibre on August 29, 2024 and sell it today you would earn a total of 154,141 from holding MercadoLibre or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
The ODP vs. MercadoLibre
Performance |
| Timeline |
| ODP |
| MercadoLibre |
ODP and MercadoLibre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ODP and MercadoLibre
The main advantage of trading using opposite ODP and MercadoLibre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ODP 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.| ODP vs. McEwen Mining | ODP vs. Grupo Sports World | ODP vs. UnitedHealth Group Incorporated | ODP vs. Micron Technology |
| MercadoLibre vs. Southern Copper | MercadoLibre vs. GMxico Transportes SAB | MercadoLibre vs. Verizon Communications | MercadoLibre vs. Micron Technology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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