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
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transportadora and Central is 0.64. 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. But the stock apears to be less risky and, when comparing its historical volatility, Transportadora de Gas is 1.07 times less risky than Central Puerto. The stock trades about -0.1 of its potential returns per unit of risk. The Central Puerto SA is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 182,000 in Central Puerto SA on November 2, 2024 and sell it today you would lose (10,000) from holding Central Puerto SA or give up 5.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| 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. Agrometal SAI | Transportadora vs. Harmony Gold Mining | Transportadora vs. Compania de Transporte |
| Central Puerto vs. United States Steel | Central Puerto vs. Harmony Gold Mining | Central Puerto vs. Telecom Argentina | Central Puerto vs. Agrometal SAI |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |