Correlation Between Corporacion America and Transportadora
Can any of the company-specific risk be diversified away by investing in both Corporacion America 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 Corporacion America and Transportadora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporacion America Airports and Transportadora de Gas, you can compare the effects of market volatilities on Corporacion America 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 Corporacion America with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporacion America and Transportadora.
Diversification Opportunities for Corporacion America and Transportadora
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corporacion and Transportadora is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion America Airports 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 Corporacion America 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 Corporacion America Airports 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 Corporacion America i.e., Corporacion America and Transportadora go up and down completely randomly.
Pair Corralation between Corporacion America and Transportadora
Given the investment horizon of 90 days Corporacion America is expected to generate 5.15 times less return on investment than Transportadora. But when comparing it to its historical volatility, Corporacion America Airports is 1.39 times less risky than Transportadora. It trades about 0.04 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,695 in Transportadora de Gas on September 5, 2024 and sell it today you would earn a total of 1,244 from holding Transportadora de Gas or generate 73.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporacion America Airports vs. Transportadora de Gas
Performance |
| Timeline |
| Corporacion America |
| Transportadora de Gas |
Corporacion America and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporacion America and Transportadora
The main advantage of trading using opposite Corporacion America and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion America 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.| Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. AerSale Corp | Corporacion America vs. Flughafen Zrich AG |
| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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