Correlation Between Ledesma SAAI and Transportadora
Can any of the company-specific risk be diversified away by investing in both Ledesma SAAI 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 Ledesma SAAI and Transportadora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ledesma SAAI and Transportadora de Gas, you can compare the effects of market volatilities on Ledesma SAAI 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 Ledesma SAAI with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ledesma SAAI and Transportadora.
Diversification Opportunities for Ledesma SAAI and Transportadora
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ledesma and Transportadora is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ledesma SAAI 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 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 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 Ledesma SAAI i.e., Ledesma SAAI and Transportadora go up and down completely randomly.
Pair Corralation between Ledesma SAAI and Transportadora
Assuming the 90 days trading horizon Ledesma SAAI is expected to generate 0.65 times more return on investment than Transportadora. However, Ledesma SAAI is 1.55 times less risky than Transportadora. It trades about 0.02 of its potential returns per unit of risk. Transportadora de Gas is currently generating about -0.05 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 | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ledesma SAAI vs. Transportadora de Gas
Performance |
| Timeline |
| Ledesma SAAI |
| Transportadora de Gas |
Ledesma SAAI and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ledesma SAAI and Transportadora
The main advantage of trading using opposite Ledesma SAAI and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ledesma SAAI 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.| Ledesma SAAI vs. Harmony Gold Mining | Ledesma SAAI vs. Agrometal SAI | Ledesma SAAI vs. United States Steel | Ledesma SAAI vs. Compania de Transporte |
| Transportadora vs. Naturgy BAN SA | Transportadora vs. Distribuidora de Gas | Transportadora vs. International Business Machines |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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