Correlation Between Vista Energy, and Telecom Argentina

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

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

Diversification Opportunities for Vista Energy, and Telecom Argentina

0.61

Correlation Coefficient

Vista Energy,  Telecom Argentina

Poor diversification

The 3 months correlation between Vista and Telecom is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vista Energy, SAB and Telecom Argentina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina and Vista Energy, 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 Vista Energy, SAB are associated (or correlated) with Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of Vista Energy, i.e., Vista Energy, and Telecom Argentina go up and down completely randomly.

Pair Corralation between Vista Energy, and Telecom Argentina

Assuming the 90 days trading horizon Vista Energy, SAB is expected to under-perform the Telecom Argentina. In addition to that, Vista Energy, is 1.01 times more volatile than Telecom Argentina. It trades about -0.07 of its total potential returns per unit of risk. Telecom Argentina is currently generating about -0.06 per unit of volatility. If you would invest  317,000  in Telecom Argentina on December 31, 2024 and sell it today you would lose (44,500) from holding Telecom Argentina or give up 14.04% of portfolio value over 90 days.

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

Vista Energy, SAB  vs.  Telecom Argentina

Vista Energy, SAB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vista Energy, SAB 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 fundamental drivers remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Telecom Argentina

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telecom Argentina 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 fundamental drivers remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Vista Energy, and Telecom Argentina

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

The idea behind Vista Energy, SAB and Telecom Argentina 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.