Correlation Between Promotora and First Trust
Can any of the company-specific risk be diversified away by investing in both Promotora and First Trust 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 Promotora and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Promotora y Operadora and First Trust FTSE, you can compare the effects of market volatilities on Promotora and First Trust 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 Promotora with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promotora and First Trust.
Diversification Opportunities for Promotora and First Trust
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Promotora and First is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Promotora y Operadora and First Trust FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust FTSE and Promotora 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 Promotora y Operadora are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust FTSE has no effect on the direction of Promotora i.e., Promotora and First Trust go up and down completely randomly.
Pair Corralation between Promotora and First Trust
If you would invest 17,659 in Promotora y Operadora on August 31, 2024 and sell it today you would earn a total of 1,150 from holding Promotora y Operadora or generate 6.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Promotora y Operadora vs. First Trust FTSE
Performance |
| Timeline |
| Promotora y Operadora |
| First Trust FTSE |
Promotora and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Promotora and First Trust
The main advantage of trading using opposite Promotora and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promotora position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Promotora vs. Gruma SAB de | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del | Promotora vs. Kimberly Clark de Mxico |
| First Trust vs. Promotora y Operadora | First Trust vs. UnitedHealth Group Incorporated | First Trust vs. Qulitas Controladora SAB | First Trust vs. Hoteles City Express |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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