Correlation Between Ledesma SAAI and Naturgy BAN
Can any of the company-specific risk be diversified away by investing in both Ledesma SAAI and Naturgy BAN 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 Ledesma SAAI and Naturgy BAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ledesma SAAI and Naturgy BAN SA, you can compare the effects of market volatilities on Ledesma SAAI and Naturgy BAN 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 Ledesma SAAI with a short position of Naturgy BAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ledesma SAAI and Naturgy BAN.
Diversification Opportunities for Ledesma SAAI and Naturgy BAN
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ledesma and Naturgy is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ledesma SAAI and Naturgy BAN SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturgy BAN SA and Ledesma SAAI 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 Ledesma SAAI are associated (or correlated) with Naturgy BAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturgy BAN SA has no effect on the direction of Ledesma SAAI i.e., Ledesma SAAI and Naturgy BAN go up and down completely randomly.
Pair Corralation between Ledesma SAAI and Naturgy BAN
Assuming the 90 days trading horizon Ledesma SAAI is expected to under-perform the Naturgy BAN. But the stock apears to be less risky and, when comparing its historical volatility, Ledesma SAAI is 2.55 times less risky than Naturgy BAN. The stock trades about -0.08 of its potential returns per unit of risk. The Naturgy BAN SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 231,000 in Naturgy BAN SA on October 20, 2024 and sell it today you would earn a total of 20,500 from holding Naturgy BAN SA or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ledesma SAAI vs. Naturgy BAN SA
Performance |
| Timeline |
| Ledesma SAAI |
| Naturgy BAN SA |
Ledesma SAAI and Naturgy BAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ledesma SAAI and Naturgy BAN
The main advantage of trading using opposite Ledesma SAAI and Naturgy BAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ledesma SAAI position performs unexpectedly, Naturgy BAN 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 Naturgy BAN will offset losses from the drop in Naturgy BAN's long position.| Ledesma SAAI vs. Molinos Agro SA | Ledesma SAAI vs. Cresud SA | Ledesma SAAI vs. San Miguel AG | Ledesma SAAI vs. Inversora Juramento SA |
| Naturgy BAN vs. Transportadora de Gas | Naturgy BAN vs. Distribuidora de Gas | Naturgy BAN vs. Walmart | Naturgy BAN 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |