Correlation Between Ledesma SAAI and Pampa Energia
Can any of the company-specific risk be diversified away by investing in both Ledesma SAAI and Pampa Energia 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 Pampa Energia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ledesma SAAI and Pampa Energia SA, you can compare the effects of market volatilities on Ledesma SAAI and Pampa Energia 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 Pampa Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ledesma SAAI and Pampa Energia.
Diversification Opportunities for Ledesma SAAI and Pampa Energia
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ledesma and Pampa is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ledesma SAAI and Pampa Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energia 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 Pampa Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energia SA has no effect on the direction of Ledesma SAAI i.e., Ledesma SAAI and Pampa Energia go up and down completely randomly.
Pair Corralation between Ledesma SAAI and Pampa Energia
Assuming the 90 days trading horizon Ledesma SAAI is expected to generate 0.71 times more return on investment than Pampa Energia. However, Ledesma SAAI is 1.4 times less risky than Pampa Energia. It trades about 0.02 of its potential returns per unit of risk. Pampa Energia SA is currently generating about -0.02 per unit of risk. If you would invest 148,000 in Ledesma SAAI on November 2, 2024 and sell it today you would earn a total of 500.00 from holding Ledesma SAAI or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ledesma SAAI vs. Pampa Energia SA
Performance |
| Timeline |
| Ledesma SAAI |
| Pampa Energia SA |
Ledesma SAAI and Pampa Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ledesma SAAI and Pampa Energia
The main advantage of trading using opposite Ledesma SAAI and Pampa Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ledesma SAAI position performs unexpectedly, Pampa Energia 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 Pampa Energia will offset losses from the drop in Pampa Energia's long position.| Ledesma SAAI vs. Harmony Gold Mining | Ledesma SAAI vs. Agrometal SAI | Ledesma SAAI vs. United States Steel | Ledesma SAAI vs. Compania de Transporte |
| Pampa Energia vs. Transportadora de Gas | Pampa Energia vs. Compania de Transporte | Pampa Energia vs. United States Steel | Pampa Energia vs. Harmony Gold Mining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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