Correlation Between Central Puerto and Transportadora
Can any of the company-specific risk be diversified away by investing in both Central Puerto 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 Central Puerto and Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on Central Puerto 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 Central Puerto with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Puerto and Transportadora.
Diversification Opportunities for Central Puerto and Transportadora
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Central and Transportadora is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Central Puerto SA 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 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 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 Central Puerto i.e., Central Puerto and Transportadora go up and down completely randomly.
Pair Corralation between Central Puerto and Transportadora
Assuming the 90 days trading horizon Central Puerto is expected to generate 1.31 times less return on investment than Transportadora. In addition to that, Central Puerto is 1.07 times more volatile than Transportadora de Gas. It trades about 0.33 of its total potential returns per unit of risk. Transportadora de Gas is currently generating about 0.47 per unit of volatility. If you would invest 511,000 in Transportadora de Gas on August 29, 2024 and sell it today you would earn a total of 138,000 from holding Transportadora de Gas or generate 27.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Puerto SA vs. Transportadora de Gas
Performance |
| Timeline |
| Central Puerto SA |
| Transportadora de Gas |
Central Puerto and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Puerto and Transportadora
The main advantage of trading using opposite Central Puerto and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Puerto 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.| Central Puerto vs. Compania de Transporte | Central Puerto vs. Transportadora de Gas | Central Puerto vs. Harmony Gold Mining | Central Puerto vs. Agrometal SAI |
| Transportadora vs. Vista Energy, SAB | Transportadora vs. United States Steel | Transportadora vs. Central Puerto SA | Transportadora vs. Pfizer Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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