Correlation Between Central Puerto and Bolsas Y
Can any of the company-specific risk be diversified away by investing in both Central Puerto and Bolsas Y 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 Central Puerto and Bolsas Y into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Puerto SA and Bolsas y Mercados, you can compare the effects of market volatilities on Central Puerto and Bolsas Y 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 Central Puerto with a short position of Bolsas Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Puerto and Bolsas Y.
Diversification Opportunities for Central Puerto and Bolsas Y
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Central and Bolsas is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Central Puerto SA and Bolsas y Mercados in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolsas y Mercados and Central Puerto 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 Central Puerto SA are associated (or correlated) with Bolsas Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolsas y Mercados has no effect on the direction of Central Puerto i.e., Central Puerto and Bolsas Y go up and down completely randomly.
Pair Corralation between Central Puerto and Bolsas Y
Assuming the 90 days trading horizon Central Puerto SA is expected to under-perform the Bolsas Y. But the stock apears to be less risky and, when comparing its historical volatility, Central Puerto SA is 1.2 times less risky than Bolsas Y. The stock trades about -0.03 of its potential returns per unit of risk. The Bolsas y Mercados is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 42,400 in Bolsas y Mercados on October 20, 2024 and sell it today you would earn a total of 3,900 from holding Bolsas y Mercados or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Central Puerto SA vs. Bolsas y Mercados
Performance |
| Timeline |
| Central Puerto SA |
| Bolsas y Mercados |
Central Puerto and Bolsas Y Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Puerto and Bolsas Y
The main advantage of trading using opposite Central Puerto and Bolsas Y positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Puerto position performs unexpectedly, Bolsas Y 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 Bolsas Y will offset losses from the drop in Bolsas Y's long position.| Central Puerto vs. Enel Generacion Costanera | Central Puerto vs. Edesa Holding SA | Central Puerto vs. Empresa Distribuidora Electrica |
| Bolsas Y vs. Walmart | Bolsas Y vs. Ledesma SAAI | Bolsas Y vs. BBVA Banco Frances | Bolsas Y vs. Transportadora de Gas |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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