Correlation Between Transportadora and Cablevision Holding
Can any of the company-specific risk be diversified away by investing in both Transportadora and Cablevision Holding 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 Cablevision Holding 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 Cablevision Holding SA, you can compare the effects of market volatilities on Transportadora and Cablevision Holding 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 Cablevision Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Cablevision Holding.
Diversification Opportunities for Transportadora and Cablevision Holding
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Transportadora and Cablevision is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Cablevision Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cablevision Holding 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 Cablevision Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cablevision Holding has no effect on the direction of Transportadora i.e., Transportadora and Cablevision Holding go up and down completely randomly.
Pair Corralation between Transportadora and Cablevision Holding
Assuming the 90 days trading horizon Transportadora is expected to generate 1.27 times less return on investment than Cablevision Holding. In addition to that, Transportadora is 1.27 times more volatile than Cablevision Holding SA. It trades about 0.12 of its total potential returns per unit of risk. Cablevision Holding SA is currently generating about 0.2 per unit of volatility. If you would invest 488,000 in Cablevision Holding SA on November 2, 2024 and sell it today you would earn a total of 280,000 from holding Cablevision Holding SA or generate 57.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.04% |
| Values | Daily Returns |
Transportadora de Gas vs. Cablevision Holding SA
Performance |
| Timeline |
| Transportadora de Gas |
| Cablevision Holding |
Transportadora and Cablevision Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Cablevision Holding
The main advantage of trading using opposite Transportadora and Cablevision Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Cablevision Holding 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 Cablevision Holding will offset losses from the drop in Cablevision Holding's long position.| Transportadora vs. Agrometal SAI | Transportadora vs. Harmony Gold Mining | Transportadora vs. Compania de Transporte |
| Cablevision Holding vs. Telecom Argentina | Cablevision Holding vs. Boldt SA | Cablevision Holding vs. Agrometal SAI | Cablevision Holding vs. United States Steel |
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 Correlations module to find global opportunities by holding instruments from different markets.
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