Correlation Between Ternium SA and Garovaglio
Can any of the company-specific risk be diversified away by investing in both Ternium SA and Garovaglio 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 Ternium SA and Garovaglio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ternium SA DRC and Garovaglio y Zorraquin, you can compare the effects of market volatilities on Ternium SA and Garovaglio 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 Ternium SA with a short position of Garovaglio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ternium SA and Garovaglio.
Diversification Opportunities for Ternium SA and Garovaglio
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ternium and Garovaglio is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ternium SA DRC and Garovaglio y Zorraquin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garovaglio y Zorraquin and Ternium SA 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 Ternium SA DRC are associated (or correlated) with Garovaglio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garovaglio y Zorraquin has no effect on the direction of Ternium SA i.e., Ternium SA and Garovaglio go up and down completely randomly.
Pair Corralation between Ternium SA and Garovaglio
Assuming the 90 days trading horizon Ternium SA is expected to generate 5.24 times less return on investment than Garovaglio. But when comparing it to its historical volatility, Ternium SA DRC is 1.18 times less risky than Garovaglio. It trades about 0.02 of its potential returns per unit of risk. Garovaglio y Zorraquin is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,135 in Garovaglio y Zorraquin on November 29, 2024 and sell it today you would earn a total of 17,890 from holding Garovaglio y Zorraquin or generate 432.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ternium SA DRC vs. Garovaglio y Zorraquin
Performance |
Timeline |
Ternium SA DRC |
Garovaglio y Zorraquin |
Ternium SA and Garovaglio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ternium SA and Garovaglio
The main advantage of trading using opposite Ternium SA and Garovaglio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ternium SA position performs unexpectedly, Garovaglio 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 Garovaglio will offset losses from the drop in Garovaglio's long position.Ternium SA vs. Transportadora de Gas | ||
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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