Correlation Between Transportadora and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both Transportadora and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on Transportadora and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and STORE ELECTRONIC.
Diversification Opportunities for Transportadora and STORE ELECTRONIC
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transportadora and STORE is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of Transportadora i.e., Transportadora and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between Transportadora and STORE ELECTRONIC
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 0.87 times more return on investment than STORE ELECTRONIC. However, Transportadora de Gas is 1.15 times less risky than STORE ELECTRONIC. It trades about 0.07 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about 0.03 per unit of risk. If you would invest 1,070 in Transportadora de Gas on September 3, 2024 and sell it today you would earn a total of 1,790 from holding Transportadora de Gas or generate 167.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. STORE ELECTRONIC
Performance |
| Timeline |
| Transportadora de Gas |
| STORE ELECTRONIC |
Transportadora and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and STORE ELECTRONIC
The main advantage of trading using opposite Transportadora and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| Transportadora vs. COPLAND ROAD CAPITAL | Transportadora vs. H FARM SPA | Transportadora vs. BII Railway Transportation | Transportadora vs. Penta Ocean Construction Co |
| STORE ELECTRONIC vs. TOTAL GABON | STORE ELECTRONIC vs. Walgreens Boots Alliance | STORE ELECTRONIC vs. Peak Resources Limited |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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