Correlation Between Transcontinental and Gaucho Group

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

By analyzing existing cross correlation between Transcontinental Realty Investors and Gaucho Group Holdings, you can compare the effects of market volatilities on Transcontinental and Gaucho Group 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 Transcontinental with a short position of Gaucho Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcontinental and Gaucho Group.

Diversification Opportunities for Transcontinental and Gaucho Group

-0.43

Correlation Coefficient

Transcontinental  Gaucho Group

Very good diversification

The 3 months correlation between Transcontinental and Gaucho is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental Realty Invest and Gaucho Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaucho Group Holdings and Transcontinental 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 Transcontinental Realty Investors are associated (or correlated) with Gaucho Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaucho Group Holdings has no effect on the direction of Transcontinental i.e., Transcontinental and Gaucho Group go up and down completely randomly.

Pair Corralation between Transcontinental and Gaucho Group

Considering the 90-day investment horizon Transcontinental Realty Investors is expected to generate 0.14 times more return on investment than Gaucho Group. However, Transcontinental Realty Investors is 7.29 times less risky than Gaucho Group. It trades about 0.02 of its potential returns per unit of risk. Gaucho Group Holdings is currently generating about -0.21 per unit of risk. If you would invest  2,879  in Transcontinental Realty Investors on September 29, 2024 and sell it today you would earn a total of  48.00  from holding Transcontinental Realty Investors or generate 1.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	65.08%
Values	Daily Returns

Transcontinental Realty Invest  vs.  Gaucho Group Holdings

Transcontinental Realty

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Transcontinental Realty Investors are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Transcontinental is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Gaucho Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gaucho Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Transcontinental and Gaucho Group

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

The idea behind Transcontinental Realty Investors and Gaucho Group 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.