Correlation Between Telecom Argentina and New York
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and New York 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 New York 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 New York Community, you can compare the effects of market volatilities on Telecom Argentina and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and New York.
Diversification Opportunities for Telecom Argentina and New York
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Telecom and New is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA and New York Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Community 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Community has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and New York go up and down completely randomly.
Pair Corralation between Telecom Argentina and New York
Assuming the 90 days horizon Telecom Argentina SA is expected to generate 1.57 times more return on investment than New York. However, Telecom Argentina is 1.57 times more volatile than New York Community. It trades about 0.11 of its potential returns per unit of risk. New York Community is currently generating about -0.46 per unit of risk. If you would invest 1,260 in Telecom Argentina SA on October 9, 2024 and sell it today you would earn a total of 70.00 from holding Telecom Argentina SA or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecom Argentina SA vs. New York Community
Performance |
| Timeline |
| Telecom Argentina |
| New York Community |
Telecom Argentina and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and New York
The main advantage of trading using opposite Telecom Argentina and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Telecom Argentina vs. Nippon Telegraph and | Telecom Argentina vs. Superior Plus Corp | Telecom Argentina vs. NMI Holdings | Telecom Argentina vs. SIVERS SEMICONDUCTORS AB |
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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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