Correlation Between Banco De and Ledesma SAAI
Can any of the company-specific risk be diversified away by investing in both Banco De and Ledesma SAAI 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 Banco De and Ledesma SAAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco de Valores and Ledesma SAAI, you can compare the effects of market volatilities on Banco De and Ledesma SAAI 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 Banco De with a short position of Ledesma SAAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Ledesma SAAI.
Diversification Opportunities for Banco De and Ledesma SAAI
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and Ledesma is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Banco de Valores and Ledesma SAAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ledesma SAAI and Banco De 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 Banco de Valores are associated (or correlated) with Ledesma SAAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ledesma SAAI has no effect on the direction of Banco De i.e., Banco De and Ledesma SAAI go up and down completely randomly.
Pair Corralation between Banco De and Ledesma SAAI
Assuming the 90 days trading horizon Banco de Valores is expected to under-perform the Ledesma SAAI. But the stock apears to be less risky and, when comparing its historical volatility, Banco de Valores is 2.28 times less risky than Ledesma SAAI. The stock trades about -0.16 of its potential returns per unit of risk. The Ledesma SAAI is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 148,000 in Ledesma SAAI on November 2, 2024 and sell it today you would earn a total of 500.00 from holding Ledesma SAAI or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Banco de Valores vs. Ledesma SAAI
Performance |
| Timeline |
| Banco de Valores |
| Ledesma SAAI |
Banco De and Ledesma SAAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and Ledesma SAAI
The main advantage of trading using opposite Banco De and Ledesma SAAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, Ledesma SAAI 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 Ledesma SAAI will offset losses from the drop in Ledesma SAAI's long position.| Banco De vs. Harmony Gold Mining | Banco De vs. Agrometal SAI | Banco De vs. Transportadora de Gas | Banco De vs. Telecom Argentina |
| Ledesma SAAI vs. Harmony Gold Mining | Ledesma SAAI vs. Agrometal SAI | Ledesma SAAI vs. United States Steel | Ledesma SAAI vs. Compania de Transporte |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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