Correlation Between Matba Rofex and Transportadora
Can any of the company-specific risk be diversified away by investing in both Matba Rofex 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 Matba Rofex and Transportadora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matba Rofex SA and Transportadora de Gas, you can compare the effects of market volatilities on Matba Rofex 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 Matba Rofex with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matba Rofex and Transportadora.
Diversification Opportunities for Matba Rofex and Transportadora
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Matba and Transportadora is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Matba Rofex SA 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 Matba Rofex 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 Matba Rofex SA 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 Matba Rofex i.e., Matba Rofex and Transportadora go up and down completely randomly.
Pair Corralation between Matba Rofex and Transportadora
Assuming the 90 days trading horizon Matba Rofex SA is expected to under-perform the Transportadora. But the stock apears to be less risky and, when comparing its historical volatility, Matba Rofex SA is 1.63 times less risky than Transportadora. The stock trades about -0.3 of its potential returns per unit of risk. The Transportadora de Gas is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 637,000 in Transportadora de Gas on October 20, 2024 and sell it today you would earn a total of 35,000 from holding Transportadora de Gas or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matba Rofex SA vs. Transportadora de Gas
Performance |
| Timeline |
| Matba Rofex SA |
| Transportadora de Gas |
Matba Rofex and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matba Rofex and Transportadora
The main advantage of trading using opposite Matba Rofex and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matba Rofex 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.| Matba Rofex vs. Compania de Transporte | Matba Rofex vs. Agrometal SAI | Matba Rofex vs. Harmony Gold Mining |
| Transportadora vs. Agrometal SAI | Transportadora vs. Harmony Gold Mining | Transportadora vs. Compania de Transporte | Transportadora 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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