Correlation Between Transportadora and Bolsas Y
Can any of the company-specific risk be diversified away by investing in both Transportadora and Bolsas Y 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 Transportadora and Bolsas Y into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and Bolsas y Mercados, you can compare the effects of market volatilities on Transportadora and Bolsas Y 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 Transportadora with a short position of Bolsas Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Bolsas Y.
Diversification Opportunities for Transportadora and Bolsas Y
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transportadora and Bolsas is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Bolsas y Mercados in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolsas y Mercados and Transportadora 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 Transportadora de Gas are associated (or correlated) with Bolsas Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolsas y Mercados has no effect on the direction of Transportadora i.e., Transportadora and Bolsas Y go up and down completely randomly.
Pair Corralation between Transportadora and Bolsas Y
Assuming the 90 days trading horizon Transportadora de Gas is expected to under-perform the Bolsas Y. But the stock apears to be less risky and, when comparing its historical volatility, Transportadora de Gas is 1.05 times less risky than Bolsas Y. The stock trades about -0.1 of its potential returns per unit of risk. The Bolsas y Mercados is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 42,400 in Bolsas y Mercados on October 20, 2024 and sell it today you would earn a total of 3,900 from holding Bolsas y Mercados or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Bolsas y Mercados
Performance |
| Timeline |
| Transportadora de Gas |
| Bolsas y Mercados |
Transportadora and Bolsas Y Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Bolsas Y
The main advantage of trading using opposite Transportadora and Bolsas Y positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Bolsas Y 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 Bolsas Y will offset losses from the drop in Bolsas Y's long position.| Transportadora vs. Naturgy BAN SA | Transportadora vs. Distribuidora de Gas | Transportadora vs. Walmart | Transportadora vs. Central Puerto SA |
| Bolsas Y vs. Walmart | Bolsas Y vs. Ledesma SAAI | Bolsas Y vs. BBVA Banco Frances | Bolsas Y 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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