Correlation Between Loma Negra and Grupo Concesionario
Can any of the company-specific risk be diversified away by investing in both Loma Negra and Grupo Concesionario 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 Grupo Concesionario 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 Grupo Concesionario del, you can compare the effects of market volatilities on Loma Negra and Grupo Concesionario 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 Grupo Concesionario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loma Negra and Grupo Concesionario.
Diversification Opportunities for Loma Negra and Grupo Concesionario
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Loma and Grupo is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Loma Negra Compania and Grupo Concesionario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Concesionario del 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 Grupo Concesionario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Concesionario del has no effect on the direction of Loma Negra i.e., Loma Negra and Grupo Concesionario go up and down completely randomly.
Pair Corralation between Loma Negra and Grupo Concesionario
Assuming the 90 days trading horizon Loma Negra Compania is expected to under-perform the Grupo Concesionario. In addition to that, Loma Negra is 1.59 times more volatile than Grupo Concesionario del. It trades about -0.1 of its total potential returns per unit of risk. Grupo Concesionario del is currently generating about -0.14 per unit of volatility. If you would invest 108,500 in Grupo Concesionario del on October 20, 2024 and sell it today you would lose (6,000) from holding Grupo Concesionario del or give up 5.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Loma Negra Compania vs. Grupo Concesionario del
Performance |
| Timeline |
| Loma Negra Compania |
| Grupo Concesionario del |
Loma Negra and Grupo Concesionario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loma Negra and Grupo Concesionario
The main advantage of trading using opposite Loma Negra and Grupo Concesionario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loma Negra position performs unexpectedly, Grupo Concesionario 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 Grupo Concesionario will offset losses from the drop in Grupo Concesionario's long position.| Loma Negra vs. Harmony Gold Mining | Loma Negra vs. Transportadora de Gas | Loma Negra vs. Compania de Transporte | Loma Negra vs. Telecom Argentina |
| Grupo Concesionario vs. Harmony Gold Mining | Grupo Concesionario vs. Agrometal SAI | Grupo Concesionario vs. Telecom Argentina | Grupo Concesionario vs. Transportadora de Gas |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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