Correlation Between Transcontinental and IRSA Inversiones

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

By analyzing existing cross correlation between Transcontinental Realty Investors and IRSA Inversiones Y, you can compare the effects of market volatilities on Transcontinental and IRSA Inversiones 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 Transcontinental with a short position of IRSA Inversiones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcontinental and IRSA Inversiones.

Diversification Opportunities for Transcontinental and IRSA Inversiones

-0.11

Correlation Coefficient

Transcontinental  IRSA Inversiones

Good diversification

The 3 months correlation between Transcontinental and IRSA is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental Realty Invest and IRSA Inversiones Y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRSA Inversiones Y and Transcontinental 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 Transcontinental Realty Investors are associated (or correlated) with IRSA Inversiones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRSA Inversiones Y has no effect on the direction of Transcontinental i.e., Transcontinental and IRSA Inversiones go up and down completely randomly.

Pair Corralation between Transcontinental and IRSA Inversiones

Considering the 90-day investment horizon Transcontinental is expected to generate 48.48 times less return on investment than IRSA Inversiones. But when comparing it to its historical volatility, Transcontinental Realty Investors is 1.62 times less risky than IRSA Inversiones. It trades about 0.01 of its potential returns per unit of risk. IRSA Inversiones Y is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  1,024  in IRSA Inversiones Y on September 4, 2024 and sell it today you would earn a total of  677.00  from holding IRSA Inversiones Y or generate 66.11% return on investment over 90 days.

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

Transcontinental Realty Invest  vs.  IRSA Inversiones Y

Transcontinental Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transcontinental Realty Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Transcontinental is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

IRSA Inversiones Y

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IRSA Inversiones Y are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, IRSA Inversiones unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Transcontinental and IRSA Inversiones

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

The idea behind Transcontinental Realty Investors and IRSA Inversiones Y 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.