Correlation Between Compania and Transportadora
Can any of the company-specific risk be diversified away by investing in both Compania and Transportadora 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 Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on Compania and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Transportadora.
Diversification Opportunities for Compania and Transportadora
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compania and Transportadora is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Compania de Transporte and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Compania i.e., Compania and Transportadora go up and down completely randomly.
Pair Corralation between Compania and Transportadora
Assuming the 90 days trading horizon Compania de Transporte is expected to generate 0.97 times more return on investment than Transportadora. However, Compania de Transporte is 1.03 times less risky than Transportadora. It trades about 0.16 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.14 per unit of risk. If you would invest 13,975 in Compania de Transporte on August 26, 2024 and sell it today you would earn a total of 200,525 from holding Compania de Transporte or generate 1434.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania de Transporte vs. Transportadora de Gas
Performance |
| Timeline |
| Compania de Transporte |
| Transportadora de Gas |
Compania and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania and Transportadora
The main advantage of trading using opposite Compania and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| Compania vs. Pampa Energia SA | Compania vs. United States Steel | Compania vs. Pfizer Inc | Compania vs. Distribuidora de Gas |
| Transportadora vs. Compania de Transporte | Transportadora vs. Agrometal SAI | Transportadora vs. Harmony Gold Mining | Transportadora vs. Telecom Argentina |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |