Correlation Between Agrometal SAI and Banco Patagonia
Can any of the company-specific risk be diversified away by investing in both Agrometal SAI and Banco Patagonia 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 Agrometal SAI and Banco Patagonia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrometal SAI and Banco Patagonia, you can compare the effects of market volatilities on Agrometal SAI and Banco Patagonia 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 Agrometal SAI with a short position of Banco Patagonia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrometal SAI and Banco Patagonia.
Diversification Opportunities for Agrometal SAI and Banco Patagonia
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agrometal and Banco is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI and Banco Patagonia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Patagonia and Agrometal SAI 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 Agrometal SAI are associated (or correlated) with Banco Patagonia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Patagonia has no effect on the direction of Agrometal SAI i.e., Agrometal SAI and Banco Patagonia go up and down completely randomly.
Pair Corralation between Agrometal SAI and Banco Patagonia
Assuming the 90 days trading horizon Agrometal SAI is expected to generate 0.9 times more return on investment than Banco Patagonia. However, Agrometal SAI is 1.11 times less risky than Banco Patagonia. It trades about -0.06 of its potential returns per unit of risk. Banco Patagonia is currently generating about -0.08 per unit of risk. If you would invest 7,430 in Agrometal SAI on November 2, 2024 and sell it today you would lose (410.00) from holding Agrometal SAI or give up 5.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrometal SAI vs. Banco Patagonia
Performance |
| Timeline |
| Agrometal SAI |
| Banco Patagonia |
Agrometal SAI and Banco Patagonia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrometal SAI and Banco Patagonia
The main advantage of trading using opposite Agrometal SAI and Banco Patagonia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrometal SAI position performs unexpectedly, Banco Patagonia 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 Banco Patagonia will offset losses from the drop in Banco Patagonia's long position.| Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. Compania de Transporte | Agrometal SAI vs. Transportadora de Gas |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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