Correlation Between Trigon Metals and Banco Macro

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

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

Diversification Opportunities for Trigon Metals and Banco Macro

-0.75

Correlation Coefficient

Trigon Metals  Banco Macro

Pay attention - limited upside

The 3 months correlation between Trigon and Banco is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Trigon Metals and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA and Trigon Metals 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 Trigon Metals are associated (or correlated) with Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Trigon Metals i.e., Trigon Metals and Banco Macro go up and down completely randomly.

Pair Corralation between Trigon Metals and Banco Macro

Assuming the 90 days horizon Trigon Metals is expected to generate 3.75 times less return on investment than Banco Macro. In addition to that, Trigon Metals is 1.8 times more volatile than Banco Macro SA. It trades about 0.03 of its total potential returns per unit of risk. Banco Macro SA is currently generating about 0.21 per unit of volatility. If you would invest  4,716  in Banco Macro SA on February 2, 2024 and sell it today you would earn a total of  751.00  from holding Banco Macro SA or generate 15.92% return on investment over 90 days.

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

Trigon Metals  vs.  Banco Macro SA

Trigon Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trigon Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Banco Macro SA

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Macro SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal primary indicators, Banco Macro sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trigon Metals and Banco Macro

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

The idea behind Trigon Metals and Banco Macro SA 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.