Correlation Between Capex SA and Distribuidora
Can any of the company-specific risk be diversified away by investing in both Capex SA and Distribuidora 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 Capex SA and Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capex SA and Distribuidora de Gas, you can compare the effects of market volatilities on Capex SA and Distribuidora 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 Capex SA with a short position of Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capex SA and Distribuidora.
Diversification Opportunities for Capex SA and Distribuidora
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Capex and Distribuidora is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and Distribuidora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distribuidora de Gas and Capex 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 Capex SA are associated (or correlated) with Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distribuidora de Gas has no effect on the direction of Capex SA i.e., Capex SA and Distribuidora go up and down completely randomly.
Pair Corralation between Capex SA and Distribuidora
Assuming the 90 days trading horizon Capex SA is expected to generate 1.14 times less return on investment than Distribuidora. In addition to that, Capex SA is 1.01 times more volatile than Distribuidora de Gas. It trades about 0.14 of its total potential returns per unit of risk. Distribuidora de Gas is currently generating about 0.16 per unit of volatility. If you would invest 13,075 in Distribuidora de Gas on August 26, 2024 and sell it today you would earn a total of 174,925 from holding Distribuidora de Gas or generate 1337.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capex SA vs. Distribuidora de Gas
Performance |
| Timeline |
| Capex SA |
| Distribuidora de Gas |
Capex SA and Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capex SA and Distribuidora
The main advantage of trading using opposite Capex SA and Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capex SA position performs unexpectedly, Distribuidora 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 Distribuidora will offset losses from the drop in Distribuidora's long position.| Capex SA vs. Transportadora de Gas | Capex SA vs. Harmony Gold Mining | Capex SA vs. Agrometal SAI | Capex SA vs. Compania de Transporte |
| Distribuidora vs. Edesa Holding SA | Distribuidora vs. American Express Co | Distribuidora vs. United States Steel | Distribuidora vs. Capex SA |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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