Correlation Between Compania and Garcia Reguera
Can any of the company-specific risk be diversified away by investing in both Compania and Garcia Reguera 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 Garcia Reguera 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 Garcia Reguera SA, you can compare the effects of market volatilities on Compania and Garcia Reguera 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 Garcia Reguera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Garcia Reguera.
Diversification Opportunities for Compania and Garcia Reguera
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compania and Garcia is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Compania de Transporte and Garcia Reguera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garcia Reguera SA 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 Garcia Reguera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garcia Reguera SA has no effect on the direction of Compania i.e., Compania and Garcia Reguera go up and down completely randomly.
Pair Corralation between Compania and Garcia Reguera
Assuming the 90 days trading horizon Compania is expected to generate 1.43 times less return on investment than Garcia Reguera. But when comparing it to its historical volatility, Compania de Transporte is 2.09 times less risky than Garcia Reguera. It trades about 0.14 of its potential returns per unit of risk. Garcia Reguera SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 65,000 in Garcia Reguera SA on September 12, 2024 and sell it today you would earn a total of 415,000 from holding Garcia Reguera SA or generate 638.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania de Transporte vs. Garcia Reguera SA
Performance |
| Timeline |
| Compania de Transporte |
| Garcia Reguera SA |
Compania and Garcia Reguera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania and Garcia Reguera
The main advantage of trading using opposite Compania and Garcia Reguera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania position performs unexpectedly, Garcia Reguera 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 Garcia Reguera will offset losses from the drop in Garcia Reguera's long position.| Compania vs. Edesa Holding SA | Compania vs. Vista Energy, SAB | Compania vs. United States Steel | Compania vs. Pfizer Inc |
| Garcia Reguera vs. Harmony Gold Mining | Garcia Reguera vs. Compania de Transporte | Garcia Reguera vs. Transportadora de Gas | Garcia Reguera 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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