Correlation Between Grimoldi and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both Grimoldi and Telecom Argentina 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 Grimoldi and Telecom Argentina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grimoldi SA and Telecom Argentina, you can compare the effects of market volatilities on Grimoldi and Telecom Argentina 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 Grimoldi with a short position of Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grimoldi and Telecom Argentina.
Diversification Opportunities for Grimoldi and Telecom Argentina
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grimoldi and Telecom is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Grimoldi SA and Telecom Argentina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina and Grimoldi 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 Grimoldi SA are associated (or correlated) with Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of Grimoldi i.e., Grimoldi and Telecom Argentina go up and down completely randomly.
Pair Corralation between Grimoldi and Telecom Argentina
Assuming the 90 days trading horizon Grimoldi SA is expected to generate 0.66 times more return on investment than Telecom Argentina. However, Grimoldi SA is 1.52 times less risky than Telecom Argentina. It trades about 0.27 of its potential returns per unit of risk. Telecom Argentina is currently generating about -0.01 per unit of risk. If you would invest 118,500 in Grimoldi SA on September 26, 2024 and sell it today you would earn a total of 14,500 from holding Grimoldi SA or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grimoldi SA vs. Telecom Argentina
Performance |
| Timeline |
| Grimoldi SA |
| Telecom Argentina |
Grimoldi and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grimoldi and Telecom Argentina
The main advantage of trading using opposite Grimoldi and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grimoldi position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina's long position.| Grimoldi vs. Telecom Argentina | Grimoldi vs. Compania de Transporte | Grimoldi vs. Transportadora de Gas | Grimoldi vs. United States Steel |
| Telecom Argentina vs. Grupo Televisa SAB | Telecom Argentina vs. YPF SA D | Telecom Argentina vs. Capex SA | Telecom Argentina vs. Carboclor |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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