Correlation Between Banco Macro and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both Banco Macro and Telecom Argentina 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 Telecom Argentina 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 Telecom Argentina, you can compare the effects of market volatilities on Banco Macro and Telecom Argentina 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 Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Macro and Telecom Argentina.
Diversification Opportunities for Banco Macro and Telecom Argentina
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and Telecom is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Banco Macro SA and Telecom Argentina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina 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 Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of Banco Macro i.e., Banco Macro and Telecom Argentina go up and down completely randomly.
Pair Corralation between Banco Macro and Telecom Argentina
Assuming the 90 days trading horizon Banco Macro SA is expected to generate 1.37 times more return on investment than Telecom Argentina. However, Banco Macro is 1.37 times more volatile than Telecom Argentina. It trades about 0.13 of its potential returns per unit of risk. Telecom Argentina is currently generating about 0.08 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. Telecom Argentina
Performance |
| Timeline |
| Banco Macro SA |
| Telecom Argentina |
Banco Macro and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Macro and Telecom Argentina
The main advantage of trading using opposite Banco Macro and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Macro position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina'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 |
| Telecom Argentina vs. Agrometal SAI | Telecom Argentina vs. Transportadora de Gas | Telecom Argentina vs. Harmony Gold Mining | Telecom Argentina vs. United States Steel |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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