Correlation Between Tubacex SA and Prosegur

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

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

Diversification Opportunities for Tubacex SA and Prosegur

0.47

Correlation Coefficient

Tubacex SA  Prosegur

Very weak diversification

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

Pair Corralation between Tubacex SA and Prosegur

Assuming the 90 days trading horizon Tubacex SA is expected to generate 7.81 times less return on investment than Prosegur. In addition to that, Tubacex SA is 1.04 times more volatile than Prosegur. It trades about 0.03 of its total potential returns per unit of risk. Prosegur is currently generating about 0.28 per unit of volatility. If you would invest  219.00  in Prosegur on April 24, 2025 and sell it today you would earn a total of  80.00  from holding Prosegur or generate 36.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Tubacex SA  vs.  Prosegur

Tubacex SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tubacex SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Tubacex SA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Prosegur

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prosegur are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Prosegur exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tubacex SA and Prosegur

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

The idea behind Tubacex SA and Prosegur 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.