Correlation Between Transportadora and Capex SA
Can any of the company-specific risk be diversified away by investing in both Transportadora and Capex 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 Capex 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 Capex SA, you can compare the effects of market volatilities on Transportadora and Capex 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 Capex SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Capex SA.
Diversification Opportunities for Transportadora and Capex SA
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transportadora and Capex is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Capex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capex 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 Capex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capex SA has no effect on the direction of Transportadora i.e., Transportadora and Capex SA go up and down completely randomly.
Pair Corralation between Transportadora and Capex SA
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 0.88 times more return on investment than Capex SA. However, Transportadora de Gas is 1.14 times less risky than Capex SA. It trades about 0.11 of its potential returns per unit of risk. Capex SA is currently generating about -0.02 per unit of risk. If you would invest 658,000 in Transportadora de Gas on October 24, 2024 and sell it today you would earn a total of 43,000 from holding Transportadora de Gas or generate 6.53% 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. Capex SA
Performance |
| Timeline |
| Transportadora de Gas |
| Capex SA |
Transportadora and Capex SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Capex SA
The main advantage of trading using opposite Transportadora and Capex SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Capex 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 Capex SA will offset losses from the drop in Capex SA's long position.| Transportadora vs. Harmony Gold Mining | Transportadora vs. Compania de Transporte | Transportadora vs. Agrometal SAI | Transportadora vs. United States Steel |
| Capex SA vs. Transportadora de Gas | Capex SA vs. Agrometal SAI | Capex SA vs. United States Steel | Capex SA vs. Telecom Argentina |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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