Correlation Between Telecom Argentina and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and INSURANCE AUST 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 INSURANCE AUST 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 INSURANCE AUST GRP, you can compare the effects of market volatilities on Telecom Argentina and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and INSURANCE AUST.
Diversification Opportunities for Telecom Argentina and INSURANCE AUST
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Telecom and INSURANCE is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and INSURANCE AUST go up and down completely randomly.
Pair Corralation between Telecom Argentina and INSURANCE AUST
Assuming the 90 days horizon Telecom Argentina SA is expected to generate 2.39 times more return on investment than INSURANCE AUST. However, Telecom Argentina is 2.39 times more volatile than INSURANCE AUST GRP. It trades about 0.07 of its potential returns per unit of risk. INSURANCE AUST GRP is currently generating about 0.1 per unit of risk. If you would invest 488.00 in Telecom Argentina SA on October 28, 2024 and sell it today you would earn a total of 712.00 from holding Telecom Argentina SA or generate 145.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Argentina SA vs. INSURANCE AUST GRP
Performance |
| Timeline |
| Telecom Argentina |
| INSURANCE AUST GRP |
Telecom Argentina and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and INSURANCE AUST
The main advantage of trading using opposite Telecom Argentina and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| Telecom Argentina vs. INFORMATION SVC GRP | Telecom Argentina vs. Pure Storage | Telecom Argentina vs. BRIT AMER TOBACCO | Telecom Argentina vs. National Retail Properties |
| INSURANCE AUST vs. WIMFARM SA EO | INSURANCE AUST vs. Granite Construction | INSURANCE AUST vs. ONWARD MEDICAL BV | INSURANCE AUST vs. DAIRY FARM INTL |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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