Correlation Between Transportadora and Edesa Holding
Can any of the company-specific risk be diversified away by investing in both Transportadora and Edesa 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 Edesa 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 Edesa Holding SA, you can compare the effects of market volatilities on Transportadora and Edesa 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 Edesa Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Edesa Holding.
Diversification Opportunities for Transportadora and Edesa Holding
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Transportadora and Edesa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Edesa Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edesa Holding 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 Edesa Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edesa Holding SA has no effect on the direction of Transportadora i.e., Transportadora and Edesa Holding go up and down completely randomly.
Pair Corralation between Transportadora and Edesa Holding
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 2.16 times more return on investment than Edesa Holding. However, Transportadora is 2.16 times more volatile than Edesa Holding SA. It trades about 0.13 of its potential returns per unit of risk. Edesa Holding SA is currently generating about 0.12 per unit of risk. If you would invest 75,350 in Transportadora de Gas on September 14, 2024 and sell it today you would earn a total of 575,650 from holding Transportadora de Gas or generate 763.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Transportadora de Gas vs. Edesa Holding SA
Performance |
| Timeline |
| Transportadora de Gas |
| Edesa Holding SA |
Transportadora and Edesa Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Edesa Holding
The main advantage of trading using opposite Transportadora and Edesa Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Edesa 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 Edesa Holding will offset losses from the drop in Edesa Holding's long position.| Transportadora vs. Edesa Holding SA | Transportadora vs. Vista Energy, SAB | Transportadora vs. United States Steel | Transportadora vs. Pfizer Inc |
| Edesa Holding vs. Harmony Gold Mining | Edesa Holding vs. Agrometal SAI | Edesa Holding vs. United States Steel | Edesa Holding 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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