Correlation Between Central Puerto and Matba Rofex
Can any of the company-specific risk be diversified away by investing in both Central Puerto and Matba Rofex 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 Matba Rofex 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 Matba Rofex SA, you can compare the effects of market volatilities on Central Puerto and Matba Rofex 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 Matba Rofex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Puerto and Matba Rofex.
Diversification Opportunities for Central Puerto and Matba Rofex
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Central and Matba is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Central Puerto SA and Matba Rofex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matba Rofex SA 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 Matba Rofex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matba Rofex SA has no effect on the direction of Central Puerto i.e., Central Puerto and Matba Rofex go up and down completely randomly.
Pair Corralation between Central Puerto and Matba Rofex
Assuming the 90 days trading horizon Central Puerto SA is expected to generate 1.4 times more return on investment than Matba Rofex. However, Central Puerto is 1.4 times more volatile than Matba Rofex SA. It trades about -0.03 of its potential returns per unit of risk. Matba Rofex SA is currently generating about -0.3 per unit of risk. If you would invest 157,000 in Central Puerto SA on October 20, 2024 and sell it today you would lose (4,000) from holding Central Puerto SA or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Puerto SA vs. Matba Rofex SA
Performance |
| Timeline |
| Central Puerto SA |
| Matba Rofex SA |
Central Puerto and Matba Rofex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Puerto and Matba Rofex
The main advantage of trading using opposite Central Puerto and Matba Rofex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Puerto position performs unexpectedly, Matba Rofex 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 Matba Rofex will offset losses from the drop in Matba Rofex's long position.| Central Puerto vs. Enel Generacion Costanera | Central Puerto vs. Edesa Holding SA | Central Puerto vs. Empresa Distribuidora Electrica |
| Matba Rofex vs. Compania de Transporte | Matba Rofex vs. Agrometal SAI | Matba Rofex vs. Harmony Gold Mining |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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