Correlation Between Telecom Argentina and Garovaglio

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

By analyzing existing cross correlation between Telecom Argentina and Garovaglio y Zorraquin, you can compare the effects of market volatilities on Telecom Argentina and Garovaglio 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 Garovaglio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and Garovaglio.

Diversification Opportunities for Telecom Argentina and Garovaglio

0.47

Correlation Coefficient

Telecom Argentina  Garovaglio

Very weak diversification

The 3 months correlation between Telecom and Garovaglio is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina and Garovaglio y Zorraquin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garovaglio y Zorraquin 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 are associated (or correlated) with Garovaglio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garovaglio y Zorraquin has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and Garovaglio go up and down completely randomly.

Pair Corralation between Telecom Argentina and Garovaglio

Assuming the 90 days trading horizon Telecom Argentina is expected to under-perform the Garovaglio. But the stock apears to be less risky and, when comparing its historical volatility, Telecom Argentina is 2.55 times less risky than Garovaglio. The stock trades about -0.04 of its potential returns per unit of risk. The Garovaglio y Zorraquin is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  22,625  in Garovaglio y Zorraquin on April 24, 2025 and sell it today you would lose (1,700) from holding Garovaglio y Zorraquin or give up 7.51% of portfolio value over 90 days.

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

Telecom Argentina  vs.  Garovaglio y Zorraquin

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 latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Garovaglio y Zorraquin

Risk-Adjusted Performance

Insignificant

Over the last 90 days Garovaglio y Zorraquin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Garovaglio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Telecom Argentina and Garovaglio

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

The idea behind Telecom Argentina and Garovaglio y Zorraquin 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 Commodity Directory module to find actively traded commodities issued by global exchanges.