Correlation Between America Movil and Telefonica
Can any of the company-specific risk be diversified away by investing in both America Movil and Telefonica 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 America Movil and Telefonica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between America Movil SAB and Telefonica SA ADR, you can compare the effects of market volatilities on America Movil and Telefonica 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 America Movil with a short position of Telefonica. Check out your portfolio center. Please also check ongoing floating volatility patterns of America Movil and Telefonica.
Diversification Opportunities for America Movil and Telefonica
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between America and Telefonica is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding America Movil SAB and Telefonica SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonica SA ADR and America Movil 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 America Movil SAB are associated (or correlated) with Telefonica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonica SA ADR has no effect on the direction of America Movil i.e., America Movil and Telefonica go up and down completely randomly.
Pair Corralation between America Movil and Telefonica
Considering the 90-day investment horizon America Movil SAB is expected to generate 1.04 times more return on investment than Telefonica. However, America Movil is 1.04 times more volatile than Telefonica SA ADR. It trades about 0.17 of its potential returns per unit of risk. Telefonica SA ADR is currently generating about 0.16 per unit of risk. If you would invest 1,418 in America Movil SAB on March 24, 2025 and sell it today you would earn a total of 285.00 from holding America Movil SAB or generate 20.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
America Movil SAB vs. Telefonica SA ADR
Performance |
| Timeline |
| America Movil SAB |
| Telefonica SA ADR |
America Movil and Telefonica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with America Movil and Telefonica
The main advantage of trading using opposite America Movil and Telefonica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if America Movil position performs unexpectedly, Telefonica 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 Telefonica will offset losses from the drop in Telefonica's long position.| America Movil vs. Telefonica Brasil SA | America Movil vs. Telefonica SA ADR | America Movil vs. TIM Participacoes SA | America Movil vs. Telkom Indonesia Tbk |
| Telefonica vs. SK Telecom Co | Telefonica vs. America Movil SAB | Telefonica vs. KT Corporation | Telefonica vs. Telefonica Brasil SA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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