Correlation Between Compania and Grupo Concesionario
Can any of the company-specific risk be diversified away by investing in both Compania and Grupo Concesionario 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 Compania and Grupo Concesionario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania de Transporte and Grupo Concesionario del, you can compare the effects of market volatilities on Compania and Grupo Concesionario 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 Compania with a short position of Grupo Concesionario. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Grupo Concesionario.
Diversification Opportunities for Compania and Grupo Concesionario
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Compania and Grupo is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Compania de Transporte and Grupo Concesionario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Concesionario del and Compania 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 Compania de Transporte are associated (or correlated) with Grupo Concesionario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Concesionario del has no effect on the direction of Compania i.e., Compania and Grupo Concesionario go up and down completely randomly.
Pair Corralation between Compania and Grupo Concesionario
Assuming the 90 days trading horizon Compania de Transporte is expected to generate 2.01 times more return on investment than Grupo Concesionario. However, Compania is 2.01 times more volatile than Grupo Concesionario del. It trades about 0.33 of its potential returns per unit of risk. Grupo Concesionario del is currently generating about 0.06 per unit of risk. If you would invest 221,500 in Compania de Transporte on September 19, 2024 and sell it today you would earn a total of 82,000 from holding Compania de Transporte or generate 37.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania de Transporte vs. Grupo Concesionario del
Performance |
| Timeline |
| Compania de Transporte |
| Grupo Concesionario del |
Compania and Grupo Concesionario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania and Grupo Concesionario
The main advantage of trading using opposite Compania and Grupo Concesionario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania position performs unexpectedly, Grupo Concesionario 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 Grupo Concesionario will offset losses from the drop in Grupo Concesionario's long position.| Compania vs. Edesa Holding SA | Compania vs. Vista Energy, SAB | Compania vs. United States Steel | Compania vs. Pfizer Inc |
| Grupo Concesionario vs. Agrometal SAI | Grupo Concesionario vs. Compania de Transporte | Grupo Concesionario vs. Transportadora de Gas | Grupo Concesionario vs. Harmony Gold Mining |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |