Correlation Between Banco Macro and Mirgor SA
Can any of the company-specific risk be diversified away by investing in both Banco Macro and Mirgor SA 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 Mirgor SA 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 Mirgor SA, you can compare the effects of market volatilities on Banco Macro and Mirgor SA 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 Mirgor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Macro and Mirgor SA.
Diversification Opportunities for Banco Macro and Mirgor SA
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and Mirgor is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Banco Macro SA and Mirgor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirgor SA 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 Mirgor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirgor SA has no effect on the direction of Banco Macro i.e., Banco Macro and Mirgor SA go up and down completely randomly.
Pair Corralation between Banco Macro and Mirgor SA
Assuming the 90 days trading horizon Banco Macro SA is expected to generate 3.77 times more return on investment than Mirgor SA. However, Banco Macro is 3.77 times more volatile than Mirgor SA. It trades about 0.13 of its potential returns per unit of risk. Mirgor SA is currently generating about 0.1 per unit of risk. If you would invest 1,110,000 in Banco Macro SA on October 20, 2024 and sell it today you would earn a total of 122,500 from holding Banco Macro SA or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Macro SA vs. Mirgor SA
Performance |
| Timeline |
| Banco Macro SA |
| Mirgor SA |
Banco Macro and Mirgor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Macro and Mirgor SA
The main advantage of trading using opposite Banco Macro and Mirgor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Macro position performs unexpectedly, Mirgor SA 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 Mirgor SA will offset losses from the drop in Mirgor SA's long position.| Banco Macro vs. Banco Santander Ro | Banco Macro vs. Banco Patagonia | Banco Macro vs. Grupo Supervielle SA | Banco Macro vs. Banco Hipotecario SA |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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