Correlation Between Loma Negra and IRSA Inversiones
Can any of the company-specific risk be diversified away by investing in both Loma Negra and IRSA Inversiones 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 IRSA Inversiones 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 IRSA Inversiones y, you can compare the effects of market volatilities on Loma Negra and IRSA Inversiones 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 IRSA Inversiones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loma Negra and IRSA Inversiones.
Diversification Opportunities for Loma Negra and IRSA Inversiones
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Loma and IRSA is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Loma Negra Compania and IRSA Inversiones y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRSA Inversiones y 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 IRSA Inversiones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRSA Inversiones y has no effect on the direction of Loma Negra i.e., Loma Negra and IRSA Inversiones go up and down completely randomly.
Pair Corralation between Loma Negra and IRSA Inversiones
Assuming the 90 days trading horizon Loma Negra Compania is expected to generate 1.39 times more return on investment than IRSA Inversiones. However, Loma Negra is 1.39 times more volatile than IRSA Inversiones y. It trades about 0.0 of its potential returns per unit of risk. IRSA Inversiones y is currently generating about -0.02 per unit of risk. If you would invest 298,000 in Loma Negra Compania on November 2, 2024 and sell it today you would lose (3,000) from holding Loma Negra Compania or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Loma Negra Compania vs. IRSA Inversiones y
Performance |
| Timeline |
| Loma Negra Compania |
| IRSA Inversiones y |
Loma Negra and IRSA Inversiones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loma Negra and IRSA Inversiones
The main advantage of trading using opposite Loma Negra and IRSA Inversiones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loma Negra position performs unexpectedly, IRSA Inversiones 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 IRSA Inversiones will offset losses from the drop in IRSA Inversiones' 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 |
| IRSA Inversiones vs. Agrometal SAI | IRSA Inversiones vs. Harmony Gold Mining | IRSA Inversiones vs. Telecom Argentina | IRSA Inversiones vs. United States Steel |
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.
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