Correlation Between Pampa Energia and Compania Introductora
Can any of the company-specific risk be diversified away by investing in both Pampa Energia and Compania Introductora 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 Compania Introductora 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 Compania Introductora de, you can compare the effects of market volatilities on Pampa Energia and Compania Introductora 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 Compania Introductora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Energia and Compania Introductora.
Diversification Opportunities for Pampa Energia and Compania Introductora
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pampa and Compania is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Energia SA and Compania Introductora de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Introductora 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 Compania Introductora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Introductora has no effect on the direction of Pampa Energia i.e., Pampa Energia and Compania Introductora go up and down completely randomly.
Pair Corralation between Pampa Energia and Compania Introductora
Assuming the 90 days trading horizon Pampa Energia SA is expected to generate 0.99 times more return on investment than Compania Introductora. However, Pampa Energia SA is 1.01 times less risky than Compania Introductora. It trades about 0.18 of its potential returns per unit of risk. Compania Introductora de is currently generating about 0.12 per unit of risk. If you would invest 191,250 in Pampa Energia SA on September 20, 2024 and sell it today you would earn a total of 215,750 from holding Pampa Energia SA or generate 112.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Pampa Energia SA vs. Compania Introductora de
Performance |
| Timeline |
| Pampa Energia SA |
| Compania Introductora |
Pampa Energia and Compania Introductora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pampa Energia and Compania Introductora
The main advantage of trading using opposite Pampa Energia and Compania Introductora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pampa Energia position performs unexpectedly, Compania Introductora 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 Compania Introductora will offset losses from the drop in Compania Introductora's long position.| Pampa Energia vs. Edesa Holding SA | Pampa Energia vs. Vista Energy, SAB | Pampa Energia vs. United States Steel | Pampa Energia vs. Pfizer Inc |
| Compania Introductora vs. Molinos Rio de | Compania Introductora vs. Pampa Energia SA | Compania Introductora vs. Agrometal SAI |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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