Correlation Between Telecom Argentina and Fiplasto
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and Fiplasto 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 Fiplasto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina and Fiplasto SA, you can compare the effects of market volatilities on Telecom Argentina and Fiplasto 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 Fiplasto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Fiplasto.
Diversification Opportunities for Telecom Argentina and Fiplasto
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Telecom and Fiplasto is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina and Fiplasto SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiplasto SA 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 Fiplasto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiplasto SA has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and Fiplasto go up and down completely randomly.
Pair Corralation between Telecom Argentina and Fiplasto
Assuming the 90 days trading horizon Telecom Argentina is expected to generate 2.16 times more return on investment than Fiplasto. However, Telecom Argentina is 2.16 times more volatile than Fiplasto SA. It trades about 0.39 of its potential returns per unit of risk. Fiplasto SA is currently generating about 0.21 per unit of risk. If you would invest 219,500 in Telecom Argentina on September 2, 2024 and sell it today you would earn a total of 85,000 from holding Telecom Argentina or generate 38.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Argentina vs. Fiplasto SA
Performance |
| Timeline |
| Telecom Argentina |
| Fiplasto SA |
Telecom Argentina and Fiplasto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and Fiplasto
The main advantage of trading using opposite Telecom Argentina and Fiplasto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, Fiplasto 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 Fiplasto will offset losses from the drop in Fiplasto's long position.| Telecom Argentina vs. United States Steel | Telecom Argentina vs. Agrometal SAI | Telecom Argentina vs. Harmony Gold Mining | Telecom Argentina vs. Compania de Transporte |
| Fiplasto vs. Harmony Gold Mining | Fiplasto vs. Agrometal SAI | Fiplasto vs. Compania de Transporte | Fiplasto 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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