Correlation Between Dycasa SA and Metrogas
Can any of the company-specific risk be diversified away by investing in both Dycasa SA and Metrogas 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 Dycasa SA and Metrogas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dycasa SA and Metrogas SA, you can compare the effects of market volatilities on Dycasa SA and Metrogas 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 Dycasa SA with a short position of Metrogas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dycasa SA and Metrogas.
Diversification Opportunities for Dycasa SA and Metrogas
Very poor diversification
The 3 months correlation between Dycasa and Metrogas is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dycasa SA and Metrogas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrogas SA and Dycasa SA 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 Dycasa SA are associated (or correlated) with Metrogas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrogas SA has no effect on the direction of Dycasa SA i.e., Dycasa SA and Metrogas go up and down completely randomly.
Pair Corralation between Dycasa SA and Metrogas
Assuming the 90 days trading horizon Dycasa SA is expected to generate 1.32 times less return on investment than Metrogas. In addition to that, Dycasa SA is 1.11 times more volatile than Metrogas SA. It trades about 0.12 of its total potential returns per unit of risk. Metrogas SA is currently generating about 0.17 per unit of volatility. If you would invest 8,720 in Metrogas SA on August 27, 2024 and sell it today you would earn a total of 207,780 from holding Metrogas SA or generate 2382.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dycasa SA vs. Metrogas SA
Performance |
| Timeline |
| Dycasa SA |
| Metrogas SA |
Dycasa SA and Metrogas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dycasa SA and Metrogas
The main advantage of trading using opposite Dycasa SA and Metrogas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dycasa SA position performs unexpectedly, Metrogas 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 Metrogas will offset losses from the drop in Metrogas' long position.| Dycasa SA vs. Pampa Energia SA | Dycasa SA vs. American Express Co | Dycasa SA vs. United States Steel | Dycasa SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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