Correlation Between Southern and Pampa Energia
Can any of the company-specific risk be diversified away by investing in both Southern and Pampa Energia 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 Southern and Pampa Energia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Company and Pampa Energia SA, you can compare the effects of market volatilities on Southern and Pampa Energia 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 Southern with a short position of Pampa Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern and Pampa Energia.
Diversification Opportunities for Southern and Pampa Energia
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southern and Pampa is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Southern Company and Pampa Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energia SA and Southern 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 Southern Company are associated (or correlated) with Pampa Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energia SA has no effect on the direction of Southern i.e., Southern and Pampa Energia go up and down completely randomly.
Pair Corralation between Southern and Pampa Energia
Allowing for the 90-day total investment horizon Southern Company is expected to generate 0.4 times more return on investment than Pampa Energia. However, Southern Company is 2.53 times less risky than Pampa Energia. It trades about 0.13 of its potential returns per unit of risk. Pampa Energia SA is currently generating about 0.04 per unit of risk. If you would invest 8,178 in Southern Company on October 20, 2024 and sell it today you would earn a total of 212.00 from holding Southern Company or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Company vs. Pampa Energia SA
Performance |
| Timeline |
| Southern |
| Pampa Energia SA |
Southern and Pampa Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern and Pampa Energia
The main advantage of trading using opposite Southern and Pampa Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern position performs unexpectedly, Pampa Energia 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 Pampa Energia will offset losses from the drop in Pampa Energia's long position.| Southern vs. Dominion Energy | Southern vs. American Electric Power | Southern vs. Nextera Energy | Southern vs. Consolidated Edison |
| Pampa Energia vs. Grupo Financiero Galicia | Pampa Energia vs. Banco Macro SA | Pampa Energia vs. Empresa Distribuidora y | Pampa Energia vs. Transportadora de Gas |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |