Correlation Between Empresa Distribuidora and Banco Macro
Can any of the company-specific risk be diversified away by investing in both Empresa Distribuidora and Banco Macro 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 Empresa Distribuidora and Banco Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empresa Distribuidora y and Banco Macro SA, you can compare the effects of market volatilities on Empresa Distribuidora and Banco Macro 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 Empresa Distribuidora with a short position of Banco Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empresa Distribuidora and Banco Macro.
Diversification Opportunities for Empresa Distribuidora and Banco Macro
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empresa and Banco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Empresa Distribuidora y and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA and Empresa 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 Empresa Distribuidora y are associated (or correlated) with Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Empresa Distribuidora i.e., Empresa Distribuidora and Banco Macro go up and down completely randomly.
Pair Corralation between Empresa Distribuidora and Banco Macro
Assuming the 90 days trading horizon Empresa Distribuidora y is expected to under-perform the Banco Macro. In addition to that, Empresa Distribuidora is 1.1 times more volatile than Banco Macro SA. It trades about -0.16 of its total potential returns per unit of risk. Banco Macro SA is currently generating about -0.05 per unit of volatility. If you would invest 1,285,000 in Banco Macro SA on November 2, 2024 and sell it today you would lose (75,000) from holding Banco Macro SA or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empresa Distribuidora y vs. Banco Macro SA
Performance |
| Timeline |
| Empresa Distribuidora |
| Banco Macro SA |
Empresa Distribuidora and Banco Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empresa Distribuidora and Banco Macro
The main advantage of trading using opposite Empresa Distribuidora and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empresa Distribuidora position performs unexpectedly, Banco Macro 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 Banco Macro will offset losses from the drop in Banco Macro's long position.| Empresa Distribuidora vs. Enel Generacion Costanera | Empresa Distribuidora vs. Boldt SA | Empresa Distribuidora vs. Agrometal SAI | Empresa Distribuidora vs. United States Steel |
| Banco Macro vs. Banco Santander Ro | Banco Macro vs. Banco Patagonia | Banco Macro vs. Grupo Supervielle SA | Banco Macro vs. Banco Hipotecario SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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