Correlation Between Banco Patagonia and ATT
Can any of the company-specific risk be diversified away by investing in both Banco Patagonia and ATT 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 Patagonia and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Patagonia and ATT Inc, you can compare the effects of market volatilities on Banco Patagonia and ATT 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 Patagonia with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Patagonia and ATT.
Diversification Opportunities for Banco Patagonia and ATT
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and ATT is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Banco Patagonia and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and Banco Patagonia 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 Patagonia are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Banco Patagonia i.e., Banco Patagonia and ATT go up and down completely randomly.
Pair Corralation between Banco Patagonia and ATT
Assuming the 90 days trading horizon Banco Patagonia is expected to generate 5.62 times more return on investment than ATT. However, Banco Patagonia is 5.62 times more volatile than ATT Inc. It trades about 0.31 of its potential returns per unit of risk. ATT Inc is currently generating about 0.0 per unit of risk. If you would invest 96,100 in Banco Patagonia on January 25, 2024 and sell it today you would earn a total of 35,900 from holding Banco Patagonia or generate 37.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Banco Patagonia vs. ATT Inc
Performance |
| Timeline |
| Banco Patagonia |
| ATT Inc |
Banco Patagonia and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Patagonia and ATT
The main advantage of trading using opposite Banco Patagonia and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Patagonia position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Banco Patagonia vs. Banco Santander Ro | Banco Patagonia vs. Grupo Supervielle SA | Banco Patagonia vs. Banco Hipotecario SA |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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