Correlation Between Transimex Transportation and Post

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

By analyzing existing cross correlation between Transimex Transportation JSC and Post and Telecommunications, you can compare the effects of market volatilities on Transimex Transportation and Post 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 Transimex Transportation with a short position of Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transimex Transportation and Post.

Diversification Opportunities for Transimex Transportation and Post

0.62

Correlation Coefficient

Transimex Transportation  Post

Poor diversification

The 3 months correlation between Transimex and Post is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Transimex Transportation JSC and Post and Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Post and Telecommuni and Transimex Transportation 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 Transimex Transportation JSC are associated (or correlated) with Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Post and Telecommuni has no effect on the direction of Transimex Transportation i.e., Transimex Transportation and Post go up and down completely randomly.

Pair Corralation between Transimex Transportation and Post

Assuming the 90 days trading horizon Transimex Transportation JSC is expected to generate 1.09 times more return on investment than Post. However, Transimex Transportation is 1.09 times more volatile than Post and Telecommunications. It trades about 0.06 of its potential returns per unit of risk. Post and Telecommunications is currently generating about 0.0 per unit of risk. If you would invest  1,036,904  in Transimex Transportation JSC on September 21, 2024 and sell it today you would earn a total of  703,096  from holding Transimex Transportation JSC or generate 67.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	76.78%
Values	Daily Returns

Transimex Transportation JSC  vs.  Post and Telecommunications

Transimex Transportation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transimex Transportation JSC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Transimex Transportation is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Post and Telecommuni

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Post and Telecommunications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Transimex Transportation and Post

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

The idea behind Transimex Transportation JSC and Post and Telecommunications 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.