Correlation Between Pampa Energia and Garcia Reguera
Can any of the company-specific risk be diversified away by investing in both Pampa Energia and Garcia Reguera 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 Garcia Reguera 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 Garcia Reguera SA, you can compare the effects of market volatilities on Pampa Energia and Garcia Reguera 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 Garcia Reguera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Energia and Garcia Reguera.
Diversification Opportunities for Pampa Energia and Garcia Reguera
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pampa and Garcia is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Energia SA and Garcia Reguera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garcia Reguera SA 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 Garcia Reguera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garcia Reguera SA has no effect on the direction of Pampa Energia i.e., Pampa Energia and Garcia Reguera go up and down completely randomly.
Pair Corralation between Pampa Energia and Garcia Reguera
Assuming the 90 days trading horizon Pampa Energia SA is expected to generate 1.41 times more return on investment than Garcia Reguera. However, Pampa Energia is 1.41 times more volatile than Garcia Reguera SA. It trades about 0.29 of its potential returns per unit of risk. Garcia Reguera SA is currently generating about -0.15 per unit of risk. If you would invest 307,000 in Pampa Energia SA on September 12, 2024 and sell it today you would earn a total of 64,500 from holding Pampa Energia SA or generate 21.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Pampa Energia SA vs. Garcia Reguera SA
Performance |
| Timeline |
| Pampa Energia SA |
| Garcia Reguera SA |
Pampa Energia and Garcia Reguera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pampa Energia and Garcia Reguera
The main advantage of trading using opposite Pampa Energia and Garcia Reguera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pampa Energia position performs unexpectedly, Garcia Reguera 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 Garcia Reguera will offset losses from the drop in Garcia Reguera's long position.| Pampa Energia vs. Compania de Transporte | Pampa Energia vs. Edesa Holding SA | Pampa Energia vs. Vista Energy, SAB | Pampa Energia vs. United States Steel |
| Garcia Reguera vs. Harmony Gold Mining | Garcia Reguera vs. Compania de Transporte | Garcia Reguera vs. Transportadora de Gas | Garcia Reguera 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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