Correlation Between Computershare and Transportadora

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

By analyzing existing cross correlation between Computershare Limited and Transportadora de Gas, you can compare the effects of market volatilities on Computershare and Transportadora 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 Computershare with a short position of Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computershare and Transportadora.

Diversification Opportunities for Computershare and Transportadora

0.5

Correlation Coefficient

Computershare  Transportadora

Very weak diversification

The 3 months correlation between Computershare and Transportadora is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Computershare Limited and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas and Computershare 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 Computershare Limited are associated (or correlated) with Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Computershare i.e., Computershare and Transportadora go up and down completely randomly.

Pair Corralation between Computershare and Transportadora

Assuming the 90 days horizon Computershare Limited is expected to generate 0.35 times more return on investment than Transportadora. However, Computershare Limited is 2.83 times less risky than Transportadora. It trades about 0.04 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.02 per unit of risk. If you would invest  2,180  in Computershare Limited on April 24, 2025 and sell it today you would earn a total of  80.00  from holding Computershare Limited or generate 3.67% return on investment over 90 days.

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

Computershare Limited  vs.  Transportadora de Gas

Computershare Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Computershare Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Computershare is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Transportadora de Gas

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Transportadora de Gas are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking signals, Transportadora is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Computershare and Transportadora

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

The idea behind Computershare Limited and Transportadora de Gas 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.