Correlation Between Holcim Argentina and Loma Negra
Can any of the company-specific risk be diversified away by investing in both Holcim Argentina and Loma Negra 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 Holcim Argentina and Loma Negra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Holcim Argentina SA and Loma Negra Compania, you can compare the effects of market volatilities on Holcim Argentina and Loma Negra 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 Holcim Argentina with a short position of Loma Negra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Holcim Argentina and Loma Negra.
Diversification Opportunities for Holcim Argentina and Loma Negra
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Holcim and Loma is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Holcim Argentina SA and Loma Negra Compania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loma Negra Compania and Holcim Argentina 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 Holcim Argentina SA are associated (or correlated) with Loma Negra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loma Negra Compania has no effect on the direction of Holcim Argentina i.e., Holcim Argentina and Loma Negra go up and down completely randomly.
Pair Corralation between Holcim Argentina and Loma Negra
Assuming the 90 days trading horizon Holcim Argentina SA is expected to under-perform the Loma Negra. But the stock apears to be less risky and, when comparing its historical volatility, Holcim Argentina SA is 1.24 times less risky than Loma Negra. The stock trades about -0.01 of its potential returns per unit of risk. The Loma Negra Compania is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 298,000 in Loma Negra Compania on November 2, 2024 and sell it today you would lose (3,000) from holding Loma Negra Compania or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Holcim Argentina SA vs. Loma Negra Compania
Performance |
| Timeline |
| Holcim Argentina |
| Loma Negra Compania |
Holcim Argentina and Loma Negra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Holcim Argentina and Loma Negra
The main advantage of trading using opposite Holcim Argentina and Loma Negra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Holcim Argentina position performs unexpectedly, Loma Negra 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 Loma Negra will offset losses from the drop in Loma Negra's long position.| Holcim Argentina vs. United States Steel | Holcim Argentina vs. Telecom Argentina | Holcim Argentina vs. Compania de Transporte | Holcim Argentina vs. Harmony Gold Mining |
| Loma Negra vs. Agrometal SAI | Loma Negra vs. Transportadora de Gas | Loma Negra vs. Harmony Gold Mining | Loma Negra vs. United States Steel |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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