Correlation Between Telecom Argentina and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and RETAIL FOOD 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 RETAIL FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina SA and RETAIL FOOD GROUP, you can compare the effects of market volatilities on Telecom Argentina and RETAIL FOOD 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 RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and RETAIL FOOD.
Diversification Opportunities for Telecom Argentina and RETAIL FOOD
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telecom and RETAIL is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP 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 SA are associated (or correlated) with RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and RETAIL FOOD go up and down completely randomly.
Pair Corralation between Telecom Argentina and RETAIL FOOD
Assuming the 90 days horizon Telecom Argentina SA is expected to generate 1.89 times more return on investment than RETAIL FOOD. However, Telecom Argentina is 1.89 times more volatile than RETAIL FOOD GROUP. It trades about 0.0 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about -0.35 per unit of risk. If you would invest 1,210 in Telecom Argentina SA on October 23, 2024 and sell it today you would lose (20.00) from holding Telecom Argentina SA or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Argentina SA vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| Telecom Argentina |
| RETAIL FOOD GROUP |
Telecom Argentina and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and RETAIL FOOD
The main advantage of trading using opposite Telecom Argentina and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| Telecom Argentina vs. T Mobile | Telecom Argentina vs. China Mobile Limited | Telecom Argentina vs. Verizon Communications | Telecom Argentina vs. ATT Inc |
| RETAIL FOOD vs. COMBA TELECOM SYST | RETAIL FOOD vs. Ribbon Communications | RETAIL FOOD vs. Telecom Argentina SA | RETAIL FOOD vs. PennantPark Investment |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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