Correlation Between Telecom Argentina and Grupo Concesionario
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and Grupo Concesionario 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 Grupo Concesionario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina and Grupo Concesionario del, you can compare the effects of market volatilities on Telecom Argentina and Grupo Concesionario 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 Grupo Concesionario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Grupo Concesionario.
Diversification Opportunities for Telecom Argentina and Grupo Concesionario
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telecom and Grupo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina and Grupo Concesionario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Concesionario del 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 Grupo Concesionario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Concesionario del has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and Grupo Concesionario go up and down completely randomly.
Pair Corralation between Telecom Argentina and Grupo Concesionario
Assuming the 90 days trading horizon Telecom Argentina is expected to generate 1.72 times more return on investment than Grupo Concesionario. However, Telecom Argentina is 1.72 times more volatile than Grupo Concesionario del. It trades about 0.08 of its potential returns per unit of risk. Grupo Concesionario del is currently generating about -0.14 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 | 95.0% |
| Values | Daily Returns |
Telecom Argentina vs. Grupo Concesionario del
Performance |
| Timeline |
| Telecom Argentina |
| Grupo Concesionario del |
Telecom Argentina and Grupo Concesionario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and Grupo Concesionario
The main advantage of trading using opposite Telecom Argentina and Grupo Concesionario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, Grupo Concesionario 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 Grupo Concesionario will offset losses from the drop in Grupo Concesionario'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 |
| Grupo Concesionario vs. Harmony Gold Mining | Grupo Concesionario vs. Agrometal SAI | Grupo Concesionario vs. Telecom Argentina | Grupo Concesionario vs. Transportadora de Gas |
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 Stocks Directory module to find actively traded stocks across global markets.
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