Correlation Between Transportadora and ABB
Can any of the company-specific risk be diversified away by investing in both Transportadora and ABB 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 Transportadora and ABB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and ABB, you can compare the effects of market volatilities on Transportadora and ABB 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 Transportadora with a short position of ABB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and ABB.
Diversification Opportunities for Transportadora and ABB
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transportadora and ABB is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and ABB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABB and Transportadora 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 Transportadora de Gas are associated (or correlated) with ABB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABB has no effect on the direction of Transportadora i.e., Transportadora and ABB go up and down completely randomly.
Pair Corralation between Transportadora and ABB
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 2.22 times more return on investment than ABB. However, Transportadora is 2.22 times more volatile than ABB. It trades about 0.07 of its potential returns per unit of risk. ABB is currently generating about 0.09 per unit of risk. If you would invest 980.00 in Transportadora de Gas on September 13, 2024 and sell it today you would earn a total of 1,680 from holding Transportadora de Gas or generate 171.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. ABB
Performance |
| Timeline |
| Transportadora de Gas |
| ABB |
Transportadora and ABB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and ABB
The main advantage of trading using opposite Transportadora and ABB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, ABB 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 ABB will offset losses from the drop in ABB's long position.| Transportadora vs. Public Storage | Transportadora vs. GOLD ROAD RES | Transportadora vs. EVS Broadcast Equipment | Transportadora vs. Texas Roadhouse |
| ABB vs. BII Railway Transportation | ABB vs. Cogent Communications Holdings | ABB vs. Transportadora de Gas | ABB vs. Entravision Communications |
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.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |