Correlation Between Telecom Argentina and ADHI KARYA

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

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

Diversification Opportunities for Telecom Argentina and ADHI KARYA

0.3

Correlation Coefficient

Telecom Argentina  ADHI KARYA

Weak diversification

The 3 months correlation between Telecom and ADHI is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA and ADHI KARYA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADHI KARYA and Telecom Argentina 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 Telecom Argentina SA are associated (or correlated) with ADHI KARYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADHI KARYA has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and ADHI KARYA go up and down completely randomly.

Pair Corralation between Telecom Argentina and ADHI KARYA

Assuming the 90 days horizon Telecom Argentina SA is expected to under-perform the ADHI KARYA. But the stock apears to be less risky and, when comparing its historical volatility, Telecom Argentina SA is 7.45 times less risky than ADHI KARYA. The stock trades about -0.09 of its potential returns per unit of risk. The ADHI KARYA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.90  in ADHI KARYA on December 22, 2024 and sell it today you would lose (0.40) from holding ADHI KARYA or give up 44.44% of portfolio value over 90 days.

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

Telecom Argentina SA  vs.  ADHI KARYA

Telecom Argentina

Risk-Adjusted Performance

Very Weak

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

ADHI KARYA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ADHI KARYA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, ADHI KARYA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Telecom Argentina and ADHI KARYA

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

The idea behind Telecom Argentina SA and ADHI KARYA 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.