Correlation Between Central Puerto and Albertsons Companies

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Can any of the company-specific risk be diversified away by investing in both Central Puerto and Albertsons Companies 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 Central Puerto and Albertsons Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Puerto and Albertsons Companies, you can compare the effects of market volatilities on Central Puerto and Albertsons Companies 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 Central Puerto with a short position of Albertsons Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Puerto and Albertsons Companies.

Diversification Opportunities for Central Puerto and Albertsons Companies

0.65
  Correlation Coefficient

Poor diversification

The 24 months correlation between Central and Albertsons is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Central Puerto and Albertsons Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albertsons Companies and Central Puerto 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 Central Puerto are associated (or correlated) with Albertsons Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albertsons Companies has no effect on the direction of Central Puerto i.e., Central Puerto and Albertsons Companies go up and down completely randomly.

Pair Corralation between Central Puerto and Albertsons Companies

Given the investment horizon of 90 days Central Puerto is expected to generate 1.27 times more return on investment than Albertsons Companies. However, Central Puerto is 1.27 times more volatile than Albertsons Companies. It trades about 0.05 of its potential returns per unit of risk. Albertsons Companies is currently generating about 0.06 per unit of risk. If you would invest  269.00  in Central Puerto on September 10, 2022 and sell it today you would earn a total of  224.00  from holding Central Puerto or generate 83.27% return on investment over 90 days.
Time Period24 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Central Puerto  vs.  Albertsons Companies

 Performance (%) 
       Timeline  
Central Puerto 
Central Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Central Puerto are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Central Puerto may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Central Price Channel

Albertsons Companies 
Albertsons Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Albertsons Companies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Albertsons Companies may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Albertsons Price Channel

Central Puerto and Albertsons Companies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Central Puerto and Albertsons Companies

The main advantage of trading using opposite Central Puerto and Albertsons Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Puerto position performs unexpectedly, Albertsons Companies 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 Albertsons Companies will offset losses from the drop in Albertsons Companies' long position.
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The idea behind Central Puerto and Albertsons Companies 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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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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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