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
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compania and Grupo is 0.16. 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 1.69 times more return on investment than Grupo Concesionario. However, Compania is 1.69 times more volatile than Grupo Concesionario del. It trades about 0.01 of its potential returns per unit of risk. Grupo Concesionario del is currently generating about -0.27 per unit of risk. If you would invest 283,000 in Compania de Transporte on November 2, 2024 and sell it today you would lose (1,000.00) from holding Compania de Transporte or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| 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.The idea behind Compania de Transporte and Grupo Concesionario del pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Grupo Concesionario vs. Agrometal SAI | Grupo Concesionario vs. Harmony Gold Mining | Grupo Concesionario vs. Telecom Argentina | Grupo Concesionario 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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