Correlation Between Transportadora and ELECTROLUX
Can any of the company-specific risk be diversified away by investing in both Transportadora and ELECTROLUX 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 ELECTROLUX 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 ELECTROLUX B ADR2, you can compare the effects of market volatilities on Transportadora and ELECTROLUX 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 ELECTROLUX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and ELECTROLUX.
Diversification Opportunities for Transportadora and ELECTROLUX
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Transportadora and ELECTROLUX is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and ELECTROLUX B ADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTROLUX B ADR2 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 ELECTROLUX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECTROLUX B ADR2 has no effect on the direction of Transportadora i.e., Transportadora and ELECTROLUX go up and down completely randomly.
Pair Corralation between Transportadora and ELECTROLUX
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 1.54 times more return on investment than ELECTROLUX. However, Transportadora is 1.54 times more volatile than ELECTROLUX B ADR2. It trades about 0.16 of its potential returns per unit of risk. ELECTROLUX B ADR2 is currently generating about 0.0 per unit of risk. If you would invest 1,830 in Transportadora de Gas on September 12, 2024 and sell it today you would earn a total of 830.00 from holding Transportadora de Gas or generate 45.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. ELECTROLUX B ADR2
Performance |
| Timeline |
| Transportadora de Gas |
| ELECTROLUX B ADR2 |
Transportadora and ELECTROLUX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and ELECTROLUX
The main advantage of trading using opposite Transportadora and ELECTROLUX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, ELECTROLUX 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 ELECTROLUX will offset losses from the drop in ELECTROLUX's long position.| Transportadora vs. Public Storage | Transportadora vs. GOLD ROAD RES | Transportadora vs. EVS Broadcast Equipment | Transportadora vs. Texas Roadhouse |
| ELECTROLUX vs. Qingdao Haier Co | ELECTROLUX vs. Qingdao Haier Co | ELECTROLUX vs. Mohawk Industries | ELECTROLUX vs. SEB 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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