Correlation Between Telecom Argentina and CORNISH METALS

Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and CORNISH METALS 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 Telecom Argentina and CORNISH METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Telecom Argentina SA and CORNISH METALS INC, you can compare the effects of market volatilities on Telecom Argentina and CORNISH METALS 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 Telecom Argentina with a short position of CORNISH METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and CORNISH METALS.

Diversification Opportunities for Telecom Argentina and CORNISH METALS

-0.16

Correlation Coefficient

Telecom Argentina  CORNISH METALS

Good diversification

The 3 months correlation between Telecom and CORNISH is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA and CORNISH METALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORNISH METALS INC and Telecom Argentina 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 Telecom Argentina SA are associated (or correlated) with CORNISH METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORNISH METALS INC has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and CORNISH METALS go up and down completely randomly.

Pair Corralation between Telecom Argentina and CORNISH METALS

Assuming the 90 days horizon Telecom Argentina SA is expected to generate 0.7 times more return on investment than CORNISH METALS. However, Telecom Argentina SA is 1.43 times less risky than CORNISH METALS. It trades about -0.04 of its potential returns per unit of risk. CORNISH METALS INC is currently generating about -0.03 per unit of risk. If you would invest  875.00  in Telecom Argentina SA on May 9, 2025 and sell it today you would lose (85.00) from holding Telecom Argentina SA or give up 9.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Telecom Argentina SA  vs.  CORNISH METALS INC

Telecom Argentina

Risk-Adjusted Performance

Weakest

Over the last 90 days Telecom Argentina SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CORNISH METALS INC

Risk-Adjusted Performance

Weakest

Over the last 90 days CORNISH METALS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Telecom Argentina and CORNISH METALS

The main advantage of trading using opposite Telecom Argentina and CORNISH METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, CORNISH METALS 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 CORNISH METALS will offset losses from the drop in CORNISH METALS's long position.

The idea behind Telecom Argentina SA and CORNISH METALS INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.