Correlation Between Rigolleau and Distribuidora
Can any of the company-specific risk be diversified away by investing in both Rigolleau and Distribuidora 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 Rigolleau and Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rigolleau SA and Distribuidora de Gas, you can compare the effects of market volatilities on Rigolleau and Distribuidora 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 Rigolleau with a short position of Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rigolleau and Distribuidora.
Diversification Opportunities for Rigolleau and Distribuidora
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rigolleau and Distribuidora is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Rigolleau SA and Distribuidora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Distribuidora de Gas and Rigolleau 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 Rigolleau SA are associated (or correlated) with Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Distribuidora de Gas has no effect on the direction of Rigolleau i.e., Rigolleau and Distribuidora go up and down completely randomly.
Pair Corralation between Rigolleau and Distribuidora
Assuming the 90 days trading horizon Rigolleau is expected to generate 2.16 times less return on investment than Distribuidora. But when comparing it to its historical volatility, Rigolleau SA is 1.59 times less risky than Distribuidora. It trades about 0.11 of its potential returns per unit of risk. Distribuidora de Gas is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 18,650 in Distribuidora de Gas on September 20, 2024 and sell it today you would earn a total of 181,350 from holding Distribuidora de Gas or generate 972.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rigolleau SA vs. Distribuidora de Gas
Performance |
| Timeline |
| Rigolleau SA |
| Distribuidora de Gas |
Rigolleau and Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rigolleau and Distribuidora
The main advantage of trading using opposite Rigolleau and Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rigolleau position performs unexpectedly, Distribuidora 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 Distribuidora will offset losses from the drop in Distribuidora's long position.| Rigolleau vs. American Express Co | Rigolleau vs. QUALCOMM Incorporated | Rigolleau vs. United States Steel | Rigolleau vs. Pfizer Inc |
| Distribuidora vs. Naturgy BAN SA | Distribuidora vs. Transportadora de Gas | Distribuidora vs. Edesa Holding SA | Distribuidora 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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