Correlation Between Pampa Energia and Garovaglio
Can any of the company-specific risk be diversified away by investing in both Pampa Energia and Garovaglio 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 Garovaglio 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 Garovaglio y Zorraquin, you can compare the effects of market volatilities on Pampa Energia and Garovaglio 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 Garovaglio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Energia and Garovaglio.
Diversification Opportunities for Pampa Energia and Garovaglio
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pampa and Garovaglio is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Energia SA and Garovaglio y Zorraquin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garovaglio y Zorraquin 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 Garovaglio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garovaglio y Zorraquin has no effect on the direction of Pampa Energia i.e., Pampa Energia and Garovaglio go up and down completely randomly.
Pair Corralation between Pampa Energia and Garovaglio
Assuming the 90 days trading horizon Pampa Energia is expected to generate 1.31 times less return on investment than Garovaglio. But when comparing it to its historical volatility, Pampa Energia SA is 1.39 times less risky than Garovaglio. It trades about 0.09 of its potential returns per unit of risk. Garovaglio y Zorraquin is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8,200 in Garovaglio y Zorraquin on January 23, 2025 and sell it today you would earn a total of 12,450 from holding Garovaglio y Zorraquin or generate 151.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Pampa Energia SA vs. Garovaglio y Zorraquin
Performance |
| Timeline |
| Pampa Energia SA |
| Garovaglio y Zorraquin |
Pampa Energia and Garovaglio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pampa Energia and Garovaglio
The main advantage of trading using opposite Pampa Energia and Garovaglio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pampa Energia position performs unexpectedly, Garovaglio 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 Garovaglio will offset losses from the drop in Garovaglio's long position.| Pampa Energia vs. Harmony Gold Mining | Pampa Energia vs. Compania de Transporte | Pampa Energia vs. Agrometal SAI |
| Garovaglio vs. Carlos Casado | Garovaglio vs. Sociedad Comercial del | Garovaglio vs. Edesa Holding SA | Garovaglio vs. Longvie 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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