Correlation Between United States and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both United States and Telecom Argentina 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 United States and Telecom Argentina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Telecom Argentina, you can compare the effects of market volatilities on United States and Telecom Argentina 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 United States with a short position of Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Telecom Argentina.
Diversification Opportunities for United States and Telecom Argentina
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Telecom is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Telecom Argentina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina and United States 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 United States Steel are associated (or correlated) with Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of United States i.e., United States and Telecom Argentina go up and down completely randomly.
Pair Corralation between United States and Telecom Argentina
Given the investment horizon of 90 days United States Steel is expected to generate 0.91 times more return on investment than Telecom Argentina. However, United States Steel is 1.1 times less risky than Telecom Argentina. It trades about 0.19 of its potential returns per unit of risk. Telecom Argentina is currently generating about -0.05 per unit of risk. If you would invest 1,287,500 in United States Steel on November 2, 2024 and sell it today you would earn a total of 145,000 from holding United States Steel or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Telecom Argentina
Performance |
| Timeline |
| United States Steel |
| Telecom Argentina |
United States and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Telecom Argentina
The main advantage of trading using opposite United States and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina's long position.| United States vs. Boldt SA | United States vs. Agrometal SAI | United States vs. Capex SA | United States vs. Pfizer Inc |
| Telecom Argentina vs. Harmony Gold Mining | Telecom Argentina vs. Compania de Transporte | Telecom Argentina vs. United States Steel | Telecom Argentina 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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