Correlation Between IRSA Inversiones and Distribuidora
Can any of the company-specific risk be diversified away by investing in both IRSA Inversiones and Distribuidora 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 IRSA Inversiones and Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IRSA Inversiones y and Distribuidora de Gas, you can compare the effects of market volatilities on IRSA Inversiones and Distribuidora 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 IRSA Inversiones with a short position of Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRSA Inversiones and Distribuidora.
Diversification Opportunities for IRSA Inversiones and Distribuidora
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IRSA and Distribuidora is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding IRSA Inversiones y and Distribuidora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distribuidora de Gas and IRSA Inversiones 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 IRSA Inversiones y are associated (or correlated) with Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distribuidora de Gas has no effect on the direction of IRSA Inversiones i.e., IRSA Inversiones and Distribuidora go up and down completely randomly.
Pair Corralation between IRSA Inversiones and Distribuidora
Assuming the 90 days trading horizon IRSA Inversiones y is expected to generate 0.64 times more return on investment than Distribuidora. However, IRSA Inversiones y is 1.57 times less risky than Distribuidora. It trades about -0.01 of its potential returns per unit of risk. Distribuidora de Gas is currently generating about -0.11 per unit of risk. If you would invest 177,000 in IRSA Inversiones y on October 20, 2024 and sell it today you would lose (1,500) from holding IRSA Inversiones y or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IRSA Inversiones y vs. Distribuidora de Gas
Performance |
| Timeline |
| IRSA Inversiones y |
| Distribuidora de Gas |
IRSA Inversiones and Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRSA Inversiones and Distribuidora
The main advantage of trading using opposite IRSA Inversiones and Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRSA Inversiones position performs unexpectedly, Distribuidora 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 Distribuidora will offset losses from the drop in Distribuidora's long position.| IRSA Inversiones vs. Compania de Transporte | IRSA Inversiones vs. Transportadora de Gas | IRSA Inversiones vs. Telecom Argentina | IRSA Inversiones vs. Harmony Gold Mining |
| Distribuidora vs. Naturgy BAN SA | Distribuidora vs. Transportadora de Gas | Distribuidora vs. Walmart | Distribuidora vs. Central Puerto 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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