Correlation Between IRSA Inversiones and Transportadora
Can any of the company-specific risk be diversified away by investing in both IRSA Inversiones and Transportadora 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 Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on IRSA Inversiones and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRSA Inversiones and Transportadora.
Diversification Opportunities for IRSA Inversiones and Transportadora
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IRSA and Transportadora is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding IRSA Inversiones y and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of IRSA Inversiones i.e., IRSA Inversiones and Transportadora go up and down completely randomly.
Pair Corralation between IRSA Inversiones and Transportadora
Assuming the 90 days trading horizon IRSA Inversiones y is expected to generate 0.6 times more return on investment than Transportadora. However, IRSA Inversiones y is 1.66 times less risky than Transportadora. It trades about -0.01 of its potential returns per unit of risk. Transportadora de Gas is currently generating about -0.1 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 | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
IRSA Inversiones y vs. Transportadora de Gas
Performance |
| Timeline |
| IRSA Inversiones y |
| Transportadora de Gas |
IRSA Inversiones and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRSA Inversiones and Transportadora
The main advantage of trading using opposite IRSA Inversiones and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRSA Inversiones position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora'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 |
| Transportadora vs. Naturgy BAN SA | Transportadora vs. Distribuidora de Gas | Transportadora vs. Walmart | Transportadora 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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