Correlation Between Capex SA and Transportadora

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

By analyzing existing cross correlation between Capex SA and Transportadora de Gas, you can compare the effects of market volatilities on Capex SA and Transportadora 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 Capex SA with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capex SA and Transportadora.

Diversification Opportunities for Capex SA and Transportadora

0.6

Correlation Coefficient

Capex SA  Transportadora

Poor diversification

The 3 months correlation between Capex and Transportadora is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas and Capex SA 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 Capex SA are associated (or correlated) with Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Capex SA i.e., Capex SA and Transportadora go up and down completely randomly.

Pair Corralation between Capex SA and Transportadora

Assuming the 90 days trading horizon Capex SA is expected to under-perform the Transportadora. But the stock apears to be less risky and, when comparing its historical volatility, Capex SA is 1.01 times less risky than Transportadora. The stock trades about -0.14 of its potential returns per unit of risk. The Transportadora de Gas is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  702,000  in Transportadora de Gas on December 30, 2024 and sell it today you would earn a total of  10,000  from holding Transportadora de Gas or generate 1.42% return on investment over 90 days.

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

Capex SA  vs.  Transportadora de Gas

Capex SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capex SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Transportadora de Gas

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Transportadora de Gas are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Transportadora may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Capex SA and Transportadora

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

The idea behind Capex SA and Transportadora de Gas 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.