Correlation Between Loma Negra and Banco Macro
Can any of the company-specific risk be diversified away by investing in both Loma Negra and Banco Macro 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 Loma Negra and Banco Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loma Negra Compania and Banco Macro SA, you can compare the effects of market volatilities on Loma Negra and Banco Macro 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 Loma Negra with a short position of Banco Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loma Negra and Banco Macro.
Diversification Opportunities for Loma Negra and Banco Macro
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loma and Banco is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Loma Negra Compania and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA and Loma Negra 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 Loma Negra Compania are associated (or correlated) with Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Loma Negra i.e., Loma Negra and Banco Macro go up and down completely randomly.
Pair Corralation between Loma Negra and Banco Macro
Assuming the 90 days trading horizon Loma Negra Compania is expected to generate 0.74 times more return on investment than Banco Macro. However, Loma Negra Compania is 1.34 times less risky than Banco Macro. It trades about 0.17 of its potential returns per unit of risk. Banco Macro SA is currently generating about 0.13 per unit of risk. If you would invest 185,500 in Loma Negra Compania on November 2, 2024 and sell it today you would earn a total of 109,500 from holding Loma Negra Compania or generate 59.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Loma Negra Compania vs. Banco Macro SA
Performance |
| Timeline |
| Loma Negra Compania |
| Banco Macro SA |
Loma Negra and Banco Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loma Negra and Banco Macro
The main advantage of trading using opposite Loma Negra and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loma Negra position performs unexpectedly, Banco Macro 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 Banco Macro will offset losses from the drop in Banco Macro's long position.| Loma Negra vs. Agrometal SAI | Loma Negra vs. Transportadora de Gas | Loma Negra vs. Harmony Gold Mining | Loma Negra vs. United States Steel |
| Banco Macro vs. Banco Santander Ro | Banco Macro vs. Banco Patagonia | Banco Macro vs. Grupo Supervielle SA | Banco Macro vs. Banco Hipotecario 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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