Correlation Between Promotora and IShares Core
Can any of the company-specific risk be diversified away by investing in both Promotora and IShares Core 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 IShares Core 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 iShares Core SP, you can compare the effects of market volatilities on Promotora and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Promotora and IShares Core.
Diversification Opportunities for Promotora and IShares Core
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Promotora and IShares is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Promotora y Operadora and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of Promotora i.e., Promotora and IShares Core go up and down completely randomly.
Pair Corralation between Promotora and IShares Core
Assuming the 90 days trading horizon Promotora y Operadora is expected to generate 0.84 times more return on investment than IShares Core. However, Promotora y Operadora is 1.19 times less risky than IShares Core. It trades about 0.34 of its potential returns per unit of risk. iShares Core SP is currently generating about 0.21 per unit of risk. If you would invest 17,400 in Promotora y Operadora on September 2, 2024 and sell it today you would earn a total of 2,106 from holding Promotora y Operadora or generate 12.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Promotora y Operadora vs. iShares Core SP
Performance |
| Timeline |
| Promotora y Operadora |
| iShares Core SP |
Promotora and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Promotora and IShares Core
The main advantage of trading using opposite Promotora and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Promotora position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| Promotora vs. Gruma SAB de | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del | Promotora vs. Grupo Aeroportuario del |
| IShares Core vs. iShares Trust | IShares Core vs. iShares Trust | IShares Core vs. iShares Trust | IShares Core vs. iShares Trust |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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