Correlation Between Ba Ria and Transimex Transportation

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

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

Diversification Opportunities for Ba Ria and Transimex Transportation

0.38

Correlation Coefficient

Ba Ria  Transimex Transportation

Weak diversification

The 3 months correlation between BTP and Transimex is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ba Ria Thermal and Transimex Transportation JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transimex Transportation and Ba Ria 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 Ba Ria Thermal are associated (or correlated) with Transimex Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transimex Transportation has no effect on the direction of Ba Ria i.e., Ba Ria and Transimex Transportation go up and down completely randomly.

Pair Corralation between Ba Ria and Transimex Transportation

Assuming the 90 days trading horizon Ba Ria is expected to generate 3.84 times less return on investment than Transimex Transportation. But when comparing it to its historical volatility, Ba Ria Thermal is 3.36 times less risky than Transimex Transportation. It trades about 0.04 of its potential returns per unit of risk. Transimex Transportation JSC is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,780,000  in Transimex Transportation JSC on December 23, 2024 and sell it today you would earn a total of  80,000  from holding Transimex Transportation JSC or generate 4.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	83.33%
Values	Daily Returns

Ba Ria Thermal  vs.  Transimex Transportation JSC

Ba Ria Thermal

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ba Ria Thermal are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Ba Ria is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Transimex Transportation

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Transimex Transportation JSC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Transimex Transportation may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ba Ria and Transimex Transportation

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

The idea behind Ba Ria Thermal and Transimex Transportation JSC 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.