Correlation Between Pampa Energia and Menora Mivtachim

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

By analyzing existing cross correlation between Pampa Energia SA and Menora Mivtachim Holdings, you can compare the effects of market volatilities on Pampa Energia and Menora Mivtachim 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 Pampa Energia with a short position of Menora Mivtachim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Energia and Menora Mivtachim.

Diversification Opportunities for Pampa Energia and Menora Mivtachim

0.73

Correlation Coefficient

Pampa Energia  Menora Mivtachim

Poor diversification

The 3 months correlation between Pampa and Menora is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Energia SA and Menora Mivtachim Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menora Mivtachim Holdings and Pampa Energia 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 Pampa Energia SA are associated (or correlated) with Menora Mivtachim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menora Mivtachim Holdings has no effect on the direction of Pampa Energia i.e., Pampa Energia and Menora Mivtachim go up and down completely randomly.

Pair Corralation between Pampa Energia and Menora Mivtachim

Considering the 90-day investment horizon Pampa Energia SA is expected to generate 1.67 times more return on investment than Menora Mivtachim. However, Pampa Energia is 1.67 times more volatile than Menora Mivtachim Holdings. It trades about 0.38 of its potential returns per unit of risk. Menora Mivtachim Holdings is currently generating about 0.15 per unit of risk. If you would invest  7,016  in Pampa Energia SA on October 9, 2024 and sell it today you would earn a total of  2,398  from holding Pampa Energia SA or generate 34.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.86%
Values	Daily Returns

Pampa Energia SA  vs.  Menora Mivtachim Holdings

Pampa Energia SA

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Pampa Energia SA are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Pampa Energia displayed solid returns over the last few months and may actually be approaching a breakup point.

Menora Mivtachim Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Menora Mivtachim Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical indicators, Menora Mivtachim may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pampa Energia and Menora Mivtachim

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

The idea behind Pampa Energia SA and Menora Mivtachim Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.