Correlation Between Ledesma SAAI and Metrogas
Can any of the company-specific risk be diversified away by investing in both Ledesma SAAI and Metrogas 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 Metrogas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ledesma SAAI and Metrogas SA, you can compare the effects of market volatilities on Ledesma SAAI and Metrogas 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 Metrogas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ledesma SAAI and Metrogas.
Diversification Opportunities for Ledesma SAAI and Metrogas
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ledesma and Metrogas is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ledesma SAAI and Metrogas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrogas 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 Metrogas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrogas SA has no effect on the direction of Ledesma SAAI i.e., Ledesma SAAI and Metrogas go up and down completely randomly.
Pair Corralation between Ledesma SAAI and Metrogas
Assuming the 90 days trading horizon Ledesma SAAI is expected to generate 0.52 times more return on investment than Metrogas. However, Ledesma SAAI is 1.93 times less risky than Metrogas. It trades about -0.08 of its potential returns per unit of risk. Metrogas SA is currently generating about -0.17 per unit of risk. If you would invest 146,000 in Ledesma SAAI on October 20, 2024 and sell it today you would lose (4,500) from holding Ledesma SAAI or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ledesma SAAI vs. Metrogas SA
Performance |
| Timeline |
| Ledesma SAAI |
| Metrogas SA |
Ledesma SAAI and Metrogas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ledesma SAAI and Metrogas
The main advantage of trading using opposite Ledesma SAAI and Metrogas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ledesma SAAI position performs unexpectedly, Metrogas 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 Metrogas will offset losses from the drop in Metrogas' 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 |
| Metrogas vs. Compania de Transporte | Metrogas vs. Ledesma SAAI | Metrogas vs. American Express Co | Metrogas vs. Telecom Argentina |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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