Correlation Between FingerMotion and América Móvil

Can any of the company-specific risk be diversified away by investing in both FingerMotion and América Móvil 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 FingerMotion and América Móvil into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FingerMotion and Amrica Mvil SAB, you can compare the effects of market volatilities on FingerMotion and América Móvil 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 FingerMotion with a short position of América Móvil. Check out your portfolio center. Please also check ongoing floating volatility patterns of FingerMotion and América Móvil.

Diversification Opportunities for FingerMotion and América Móvil

0.07

Correlation Coefficient

FingerMotion  América Móvil

Significant diversification

The 3 months correlation between FingerMotion and América is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding FingerMotion and Amrica Mvil SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amrica Mvil SAB and FingerMotion 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 FingerMotion are associated (or correlated) with América Móvil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amrica Mvil SAB has no effect on the direction of FingerMotion i.e., FingerMotion and América Móvil go up and down completely randomly.

Pair Corralation between FingerMotion and América Móvil

Given the investment horizon of 90 days FingerMotion is expected to under-perform the América Móvil. But the stock apears to be less risky and, when comparing its historical volatility, FingerMotion is 2.86 times less risky than América Móvil. The stock trades about -0.17 of its potential returns per unit of risk. The Amrica Mvil SAB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Amrica Mvil SAB on March 7, 2024 and sell it today you would earn a total of  5.00  from holding Amrica Mvil SAB or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

FingerMotion  vs.  Amrica Mvil SAB

FingerMotion

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FingerMotion are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, FingerMotion reported solid returns over the last few months and may actually be approaching a breakup point.

Amrica Mvil SAB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amrica Mvil SAB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, América Móvil reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FingerMotion and América Móvil

The main advantage of trading using opposite FingerMotion and América Móvil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FingerMotion position performs unexpectedly, América Móvil 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 América Móvil will offset losses from the drop in América Móvil's long position.

The idea behind FingerMotion and Amrica Mvil SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.