Correlation Between Transportadora and Central Puerto
Can any of the company-specific risk be diversified away by investing in both Transportadora and Central Puerto 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 Central Puerto 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 Central Puerto SA, you can compare the effects of market volatilities on Transportadora and Central Puerto 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 Central Puerto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Central Puerto.
Diversification Opportunities for Transportadora and Central Puerto
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Transportadora and Central is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Central Puerto SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Puerto SA 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 Central Puerto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Puerto SA has no effect on the direction of Transportadora i.e., Transportadora and Central Puerto go up and down completely randomly.
Pair Corralation between Transportadora and Central Puerto
Assuming the 90 days trading horizon Transportadora de Gas is expected to under-perform the Central Puerto. In addition to that, Transportadora is 1.13 times more volatile than Central Puerto SA. It trades about -0.1 of its total potential returns per unit of risk. Central Puerto SA is currently generating about -0.03 per unit of volatility. If you would invest 157,000 in Central Puerto SA on October 20, 2024 and sell it today you would lose (4,000) from holding Central Puerto SA or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Central Puerto SA
Performance |
| Timeline |
| Transportadora de Gas |
| Central Puerto SA |
Transportadora and Central Puerto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Central Puerto
The main advantage of trading using opposite Transportadora and Central Puerto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Central Puerto 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 Central Puerto will offset losses from the drop in Central Puerto's long position.| Transportadora vs. Naturgy BAN SA | Transportadora vs. Distribuidora de Gas | Transportadora vs. Walmart | Transportadora vs. Central Puerto SA |
| Central Puerto vs. Enel Generacion Costanera | Central Puerto vs. Edesa Holding SA | Central Puerto vs. Empresa Distribuidora Electrica |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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