Correlation Between BANK CENTRAL and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both BANK CENTRAL 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 BANK CENTRAL and Telecom Argentina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK CENTRAL ASIA and Telecom Argentina SA, you can compare the effects of market volatilities on BANK CENTRAL 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 BANK CENTRAL with a short position of Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK CENTRAL and Telecom Argentina.
Diversification Opportunities for BANK CENTRAL and Telecom Argentina
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BANK and Telecom is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and Telecom Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina and BANK CENTRAL 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 BANK CENTRAL ASIA 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 BANK CENTRAL i.e., BANK CENTRAL and Telecom Argentina go up and down completely randomly.
Pair Corralation between BANK CENTRAL and Telecom Argentina
Assuming the 90 days trading horizon BANK CENTRAL ASIA is expected to generate 0.21 times more return on investment than Telecom Argentina. However, BANK CENTRAL ASIA is 4.84 times less risky than Telecom Argentina. It trades about -0.21 of its potential returns per unit of risk. Telecom Argentina SA is currently generating about -0.12 per unit of risk. If you would invest 59.00 in BANK CENTRAL ASIA on November 4, 2024 and sell it today you would lose (2.00) from holding BANK CENTRAL ASIA or give up 3.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BANK CENTRAL ASIA vs. Telecom Argentina SA
Performance |
| Timeline |
| BANK CENTRAL ASIA |
| Telecom Argentina |
BANK CENTRAL and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK CENTRAL and Telecom Argentina
The main advantage of trading using opposite BANK CENTRAL and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK CENTRAL 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.| BANK CENTRAL vs. Charter Communications | BANK CENTRAL vs. GEAR4MUSIC LS 10 | BANK CENTRAL vs. Linedata Services SA | BANK CENTRAL vs. MOVIE GAMES SA |
| Telecom Argentina vs. Insurance Australia Group | Telecom Argentina vs. United Insurance Holdings | Telecom Argentina vs. Safety Insurance Group | Telecom Argentina vs. Japan Post Insurance |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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