Correlation Between Pampa Energia and TransAlta Corp
Can any of the company-specific risk be diversified away by investing in both Pampa Energia and TransAlta Corp 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 TransAlta Corp 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 TransAlta Corp, you can compare the effects of market volatilities on Pampa Energia and TransAlta Corp 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 TransAlta Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Energia and TransAlta Corp.
Diversification Opportunities for Pampa Energia and TransAlta Corp
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pampa and TransAlta is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Energia SA and TransAlta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAlta Corp 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 TransAlta Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAlta Corp has no effect on the direction of Pampa Energia i.e., Pampa Energia and TransAlta Corp go up and down completely randomly.
Pair Corralation between Pampa Energia and TransAlta Corp
Considering the 90-day investment horizon Pampa Energia SA is expected to generate 0.86 times more return on investment than TransAlta Corp. However, Pampa Energia SA is 1.16 times less risky than TransAlta Corp. It trades about -0.03 of its potential returns per unit of risk. TransAlta Corp is currently generating about -0.17 per unit of risk. If you would invest 8,776 in Pampa Energia SA on December 28, 2024 and sell it today you would lose (696.00) from holding Pampa Energia SA or give up 7.93% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Pampa Energia SA vs. TransAlta Corp
Performance |
Timeline |
Pampa Energia SA |
TransAlta Corp |
Pampa Energia and TransAlta Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pampa Energia and TransAlta Corp
The main advantage of trading using opposite Pampa Energia and TransAlta Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pampa Energia position performs unexpectedly, TransAlta Corp 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 TransAlta Corp will offset losses from the drop in TransAlta Corp's long position.Pampa Energia vs. Grupo Financiero Galicia | Pampa Energia vs. Banco Macro SA | Pampa Energia vs. Empresa Distribuidora y | Pampa Energia vs. Transportadora de Gas |
TransAlta Corp vs. Pampa Energia SA | TransAlta Corp vs. Vistra Energy Corp | TransAlta Corp vs. NRG Energy | TransAlta Corp vs. Power Assets Holdings |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |