Correlation Between Telecom Argentina and Ledesma SAAI

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Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and Ledesma SAAI 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 Ledesma SAAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina and Ledesma SAAI, you can compare the effects of market volatilities on Telecom Argentina and Ledesma SAAI 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 Ledesma SAAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Ledesma SAAI.

Diversification Opportunities for Telecom Argentina and Ledesma SAAI

TelecomLedesmaDiversified AwayTelecomLedesmaDiversified Away100%
0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between Telecom and Ledesma is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina and Ledesma SAAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ledesma SAAI 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 Ledesma SAAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ledesma SAAI has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and Ledesma SAAI go up and down completely randomly.

Pair Corralation between Telecom Argentina and Ledesma SAAI

Assuming the 90 days trading horizon Telecom Argentina is expected to generate 1.07 times less return on investment than Ledesma SAAI. In addition to that, Telecom Argentina is 1.13 times more volatile than Ledesma SAAI. It trades about 0.12 of its total potential returns per unit of risk. Ledesma SAAI is currently generating about 0.14 per unit of volatility. If you would invest  15,329  in Ledesma SAAI on November 30, 2024 and sell it today you would earn a total of  131,171  from holding Ledesma SAAI or generate 855.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Telecom Argentina  vs.  Ledesma SAAI

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50510
JavaScript chart by amCharts 3.21.15TECO2 LEDE
       Timeline  
Telecom Argentina 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Telecom Argentina has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15JanFebFeb2,6002,8003,0003,2003,4003,600
Ledesma SAAI 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ledesma SAAI are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ledesma SAAI may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15JanFebFeb1,3001,3501,4001,4501,5001,5501,6001,6501,700

Telecom Argentina and Ledesma SAAI Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.73-4.29-2.85-1.420.01.362.754.145.53 0.030.040.050.060.070.080.09
JavaScript chart by amCharts 3.21.15TECO2 LEDE
       Returns  

Pair Trading with Telecom Argentina and Ledesma SAAI

The main advantage of trading using opposite Telecom Argentina and Ledesma SAAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, Ledesma SAAI 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 Ledesma SAAI will offset losses from the drop in Ledesma SAAI's long position.
The idea behind Telecom Argentina and Ledesma SAAI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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