Correlation Between Telecom Argentina and Agrometal SAI
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and Agrometal SAI 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 Telecom Argentina and Agrometal SAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina and Agrometal SAI, you can compare the effects of market volatilities on Telecom Argentina and Agrometal SAI 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 Telecom Argentina with a short position of Agrometal SAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Agrometal SAI.
Diversification Opportunities for Telecom Argentina and Agrometal SAI
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telecom and Agrometal is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI and Telecom Argentina 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 Telecom Argentina are associated (or correlated) with Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and Agrometal SAI go up and down completely randomly.
Pair Corralation between Telecom Argentina and Agrometal SAI
Assuming the 90 days trading horizon Telecom Argentina is expected to generate 1.25 times more return on investment than Agrometal SAI. However, Telecom Argentina is 1.25 times more volatile than Agrometal SAI. It trades about 0.08 of its potential returns per unit of risk. Agrometal SAI is currently generating about -0.23 per unit of risk. If you would invest 276,000 in Telecom Argentina on October 20, 2024 and sell it today you would earn a total of 13,000 from holding Telecom Argentina or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Argentina vs. Agrometal SAI
Performance |
| Timeline |
| Telecom Argentina |
| Agrometal SAI |
Telecom Argentina and Agrometal SAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and Agrometal SAI
The main advantage of trading using opposite Telecom Argentina and Agrometal SAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, Agrometal SAI 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 Agrometal SAI will offset losses from the drop in Agrometal SAI's long position.| Telecom Argentina vs. Agrometal SAI | Telecom Argentina vs. Transportadora de Gas | Telecom Argentina vs. Harmony Gold Mining | Telecom Argentina vs. United States Steel |
| Agrometal SAI vs. Transportadora de Gas | Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. United States Steel | Agrometal SAI vs. Telecom Argentina |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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