Correlation Between Transportadora and Boldt SA
Can any of the company-specific risk be diversified away by investing in both Transportadora and Boldt 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 Boldt 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 Boldt SA, you can compare the effects of market volatilities on Transportadora and Boldt 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 Boldt SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Boldt SA.
Diversification Opportunities for Transportadora and Boldt SA
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transportadora and Boldt is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Boldt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boldt 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 Boldt SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boldt SA has no effect on the direction of Transportadora i.e., Transportadora and Boldt SA go up and down completely randomly.
Pair Corralation between Transportadora and Boldt SA
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 0.77 times more return on investment than Boldt SA. However, Transportadora de Gas is 1.3 times less risky than Boldt SA. It trades about 0.13 of its potential returns per unit of risk. Boldt SA is currently generating about 0.1 per unit of risk. If you would invest 77,100 in Transportadora de Gas on October 25, 2024 and sell it today you would earn a total of 655,900 from holding Transportadora de Gas or generate 850.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Boldt SA
Performance |
| Timeline |
| Transportadora de Gas |
| Boldt SA |
Transportadora and Boldt SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Boldt SA
The main advantage of trading using opposite Transportadora and Boldt SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Boldt 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 Boldt SA will offset losses from the drop in Boldt SA's long position.| Transportadora vs. Agrometal SAI | Transportadora vs. United States Steel | Transportadora vs. Capex SA | Transportadora vs. Pfizer Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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