Correlation Between Capex SA and Compania
Can any of the company-specific risk be diversified away by investing in both Capex SA and Compania 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 Compania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capex SA and Compania de Transporte, you can compare the effects of market volatilities on Capex SA and Compania 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 Compania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capex SA and Compania.
Diversification Opportunities for Capex SA and Compania
Very weak diversification
The 3 months correlation between Capex and Compania is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and Compania de Transporte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania de Transporte 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 Compania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania de Transporte has no effect on the direction of Capex SA i.e., Capex SA and Compania go up and down completely randomly.
Pair Corralation between Capex SA and Compania
Assuming the 90 days trading horizon Capex SA is expected to under-perform the Compania. In addition to that, Capex SA is 1.44 times more volatile than Compania de Transporte. It trades about -0.17 of its total potential returns per unit of risk. Compania de Transporte is currently generating about -0.18 per unit of volatility. If you would invest 296,500 in Compania de Transporte on November 6, 2024 and sell it today you would lose (35,500) from holding Compania de Transporte or give up 11.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capex SA vs. Compania de Transporte
Performance |
| Timeline |
| Capex SA |
| Compania de Transporte |
Capex SA and Compania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capex SA and Compania
The main advantage of trading using opposite Capex SA and Compania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capex SA position performs unexpectedly, Compania 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 Compania will offset losses from the drop in Compania's long position.| Capex SA vs. Harmony Gold Mining | Capex SA vs. United States Steel | Capex SA vs. Compania de Transporte | Capex SA vs. Telecom Argentina |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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