Correlation Between Distribuidora and Transportadora
Can any of the company-specific risk be diversified away by investing in both Distribuidora 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 Distribuidora and Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on Distribuidora 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 Distribuidora with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Distribuidora and Transportadora.
Diversification Opportunities for Distribuidora and Transportadora
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Distribuidora and Transportadora is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Distribuidora de Gas 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 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 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 Distribuidora i.e., Distribuidora and Transportadora go up and down completely randomly.
Pair Corralation between Distribuidora and Transportadora
Assuming the 90 days trading horizon Distribuidora de Gas is expected to generate 0.95 times more return on investment than Transportadora. However, Distribuidora de Gas is 1.05 times less risky than Transportadora. It trades about 0.15 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.13 per unit of risk. If you would invest 38,050 in Distribuidora de Gas on September 12, 2024 and sell it today you would earn a total of 170,950 from holding Distribuidora de Gas or generate 449.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.69% |
| Values | Daily Returns |
Distribuidora de Gas vs. Transportadora de Gas
Performance |
| Timeline |
| Distribuidora de Gas |
| Transportadora de Gas |
Distribuidora and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Distribuidora and Transportadora
The main advantage of trading using opposite Distribuidora and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Distribuidora 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.| Distribuidora vs. Naturgy BAN SA | Distribuidora vs. Transportadora de Gas | Distribuidora vs. Edesa Holding SA | Distribuidora vs. Longvie SA |
| Transportadora vs. Agrometal SAI | Transportadora vs. Transportadora de Gas | Transportadora vs. Harmony Gold Mining | Transportadora 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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