Correlation Between Pampa Energia and Banco Hipotecario
Can any of the company-specific risk be diversified away by investing in both Pampa Energia and Banco Hipotecario 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 Pampa Energia and Banco Hipotecario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pampa Energia SA and Banco Hipotecario SA, you can compare the effects of market volatilities on Pampa Energia and Banco Hipotecario 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 Pampa Energia with a short position of Banco Hipotecario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Energia and Banco Hipotecario.
Diversification Opportunities for Pampa Energia and Banco Hipotecario
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pampa and Banco is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Energia SA and Banco Hipotecario SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Hipotecario and Pampa Energia 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 Pampa Energia SA are associated (or correlated) with Banco Hipotecario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Hipotecario has no effect on the direction of Pampa Energia i.e., Pampa Energia and Banco Hipotecario go up and down completely randomly.
Pair Corralation between Pampa Energia and Banco Hipotecario
Assuming the 90 days trading horizon Pampa Energia SA is expected to generate 0.96 times more return on investment than Banco Hipotecario. However, Pampa Energia SA is 1.04 times less risky than Banco Hipotecario. It trades about -0.02 of its potential returns per unit of risk. Banco Hipotecario SA is currently generating about -0.12 per unit of risk. If you would invest 438,500 in Pampa Energia SA on November 2, 2024 and sell it today you would lose (10,500) from holding Pampa Energia SA or give up 2.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pampa Energia SA vs. Banco Hipotecario SA
Performance |
| Timeline |
| Pampa Energia SA |
| Banco Hipotecario |
Pampa Energia and Banco Hipotecario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pampa Energia and Banco Hipotecario
The main advantage of trading using opposite Pampa Energia and Banco Hipotecario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pampa Energia position performs unexpectedly, Banco Hipotecario 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 Hipotecario will offset losses from the drop in Banco Hipotecario's long position.| Pampa Energia vs. Transportadora de Gas | Pampa Energia vs. Compania de Transporte | Pampa Energia vs. United States Steel | Pampa Energia vs. Harmony Gold Mining |
| Banco Hipotecario vs. Banco Macro SA | Banco Hipotecario vs. Banco Santander Ro | Banco Hipotecario vs. Banco Patagonia | Banco Hipotecario vs. Grupo Supervielle 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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