Correlation Between Transportadora and Atacado SA
Can any of the company-specific risk be diversified away by investing in both Transportadora and Atacado SA 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 Atacado SA 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 Atacado SA, you can compare the effects of market volatilities on Transportadora and Atacado SA 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 Atacado SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Atacado SA.
Diversification Opportunities for Transportadora and Atacado SA
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Transportadora and Atacado is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Atacado SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacado 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 Atacado SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacado SA has no effect on the direction of Transportadora i.e., Transportadora and Atacado SA go up and down completely randomly.
Pair Corralation between Transportadora and Atacado SA
Considering the 90-day investment horizon Transportadora de Gas is expected to generate 59.88 times more return on investment than Atacado SA. However, Transportadora is 59.88 times more volatile than Atacado SA. It trades about 0.09 of its potential returns per unit of risk. Atacado SA is currently generating about 0.14 per unit of risk. If you would invest 900.00 in Transportadora de Gas on September 3, 2024 and sell it today you would earn a total of 2,072 from holding Transportadora de Gas or generate 230.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 28.89% |
| Values | Daily Returns |
Transportadora de Gas vs. Atacado SA
Performance |
| Timeline |
| Transportadora de Gas |
| Atacado SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Transportadora and Atacado SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Atacado SA
The main advantage of trading using opposite Transportadora and Atacado SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Atacado SA 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 Atacado SA will offset losses from the drop in Atacado SA's long position.| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
| Atacado SA vs. Anheuser Busch Inbev | Atacado SA vs. Southwest Airlines | Atacado SA vs. Volaris | Atacado SA vs. Celsius Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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