Correlation Between Banco Macro and Ledesma SAAI
Can any of the company-specific risk be diversified away by investing in both Banco Macro and Ledesma SAAI 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 Banco Macro and Ledesma SAAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Macro SA and Ledesma SAAI, you can compare the effects of market volatilities on Banco Macro and Ledesma SAAI 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 Banco Macro with a short position of Ledesma SAAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Macro and Ledesma SAAI.
Diversification Opportunities for Banco Macro and Ledesma SAAI
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banco and Ledesma is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Banco Macro SA and Ledesma SAAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ledesma SAAI and Banco Macro 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 Banco Macro SA are associated (or correlated) with Ledesma SAAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ledesma SAAI has no effect on the direction of Banco Macro i.e., Banco Macro and Ledesma SAAI go up and down completely randomly.
Pair Corralation between Banco Macro and Ledesma SAAI
Assuming the 90 days trading horizon Banco Macro SA is expected to generate 1.15 times more return on investment than Ledesma SAAI. However, Banco Macro is 1.15 times more volatile than Ledesma SAAI. It trades about 0.15 of its potential returns per unit of risk. Ledesma SAAI is currently generating about 0.14 per unit of risk. If you would invest 73,445 in Banco Macro SA on November 30, 2024 and sell it today you would earn a total of 920,555 from holding Banco Macro SA or generate 1253.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Banco Macro SA vs. Ledesma SAAI
Performance |
Timeline |
Banco Macro SA |
Ledesma SAAI |
Banco Macro and Ledesma SAAI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Banco Macro and Ledesma SAAI
The main advantage of trading using opposite Banco Macro and Ledesma SAAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Macro position performs unexpectedly, Ledesma SAAI 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 Ledesma SAAI will offset losses from the drop in Ledesma SAAI's long position.Banco Macro vs. Verizon Communications | ||
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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