Correlation Between Boldt SA and Transportadora
Can any of the company-specific risk be diversified away by investing in both Boldt SA and Transportadora 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 Boldt SA and Transportadora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boldt SA and Transportadora de Gas, you can compare the effects of market volatilities on Boldt SA and Transportadora 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 Boldt SA with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boldt SA and Transportadora.
Diversification Opportunities for Boldt SA and Transportadora
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boldt and Transportadora is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Boldt SA and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas and Boldt SA 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 Boldt SA are associated (or correlated) with Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Boldt SA i.e., Boldt SA and Transportadora go up and down completely randomly.
Pair Corralation between Boldt SA and Transportadora
Assuming the 90 days trading horizon Boldt SA is expected to under-perform the Transportadora. But the stock apears to be less risky and, when comparing its historical volatility, Boldt SA is 2.29 times less risky than Transportadora. The stock trades about -0.22 of its potential returns per unit of risk. The Transportadora de Gas is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 651,000 in Transportadora de Gas on October 12, 2024 and sell it today you would earn a total of 146,000 from holding Transportadora de Gas or generate 22.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boldt SA vs. Transportadora de Gas
Performance |
| Timeline |
| Boldt SA |
| Transportadora de Gas |
Boldt SA and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boldt SA and Transportadora
The main advantage of trading using opposite Boldt SA and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boldt SA position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.The idea behind Boldt SA and Transportadora de Gas pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Transportadora vs. Telecom Argentina | Transportadora vs. Harmony Gold Mining | Transportadora vs. Agrometal SAI |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |