Correlation Between Distribuidora and Bolsas Y
Can any of the company-specific risk be diversified away by investing in both Distribuidora 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 Distribuidora and Bolsas Y into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Distribuidora de Gas and Bolsas y Mercados, you can compare the effects of market volatilities on Distribuidora 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 Distribuidora with a short position of Bolsas Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distribuidora and Bolsas Y.
Diversification Opportunities for Distribuidora and Bolsas Y
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Distribuidora and Bolsas is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Distribuidora de Gas 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 Distribuidora 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 Distribuidora de Gas 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 Distribuidora i.e., Distribuidora and Bolsas Y go up and down completely randomly.
Pair Corralation between Distribuidora and Bolsas Y
Assuming the 90 days trading horizon Distribuidora de Gas is expected to generate 1.87 times more return on investment than Bolsas Y. However, Distribuidora is 1.87 times more volatile than Bolsas y Mercados. It trades about 0.1 of its potential returns per unit of risk. Bolsas y Mercados is currently generating about -0.07 per unit of risk. If you would invest 192,500 in Distribuidora de Gas on November 2, 2024 and sell it today you would earn a total of 14,500 from holding Distribuidora de Gas or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Distribuidora de Gas vs. Bolsas y Mercados
Performance |
| Timeline |
| Distribuidora de Gas |
| Bolsas y Mercados |
Distribuidora and Bolsas Y Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distribuidora and Bolsas Y
The main advantage of trading using opposite Distribuidora and Bolsas Y positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distribuidora 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.| Distribuidora vs. Naturgy BAN SA | Distribuidora vs. Transportadora de Gas | Distribuidora vs. International Business Machines |
| Bolsas Y vs. Harmony Gold Mining | Bolsas Y vs. Compania de Transporte | Bolsas Y vs. United States Steel | Bolsas Y vs. Agrometal SAI |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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