Correlation Between Transportadora and Pampa Energia
Can any of the company-specific risk be diversified away by investing in both Transportadora and Pampa Energia 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 Pampa Energia 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 Pampa Energia SA, you can compare the effects of market volatilities on Transportadora and Pampa Energia 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 Pampa Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Pampa Energia.
Diversification Opportunities for Transportadora and Pampa Energia
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Transportadora and Pampa is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Pampa Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energia 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 Pampa Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energia SA has no effect on the direction of Transportadora i.e., Transportadora and Pampa Energia go up and down completely randomly.
Pair Corralation between Transportadora and Pampa Energia
Considering the 90-day investment horizon Transportadora de Gas is expected to generate 1.65 times more return on investment than Pampa Energia. However, Transportadora is 1.65 times more volatile than Pampa Energia SA. It trades about 0.44 of its potential returns per unit of risk. Pampa Energia SA is currently generating about 0.56 per unit of risk. If you would invest 2,216 in Transportadora de Gas on August 28, 2024 and sell it today you would earn a total of 688.00 from holding Transportadora de Gas or generate 31.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Pampa Energia SA
Performance |
| Timeline |
| Transportadora de Gas |
| Pampa Energia SA |
Transportadora and Pampa Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Pampa Energia
The main advantage of trading using opposite Transportadora and Pampa Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Pampa Energia 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 Pampa Energia will offset losses from the drop in Pampa Energia's long position.| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
| Pampa Energia vs. Grupo Financiero Galicia | Pampa Energia vs. Banco Macro SA | Pampa Energia vs. Empresa Distribuidora y | Pampa Energia 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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