Correlation Between Administradora Americana and Cencosud
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By analyzing existing cross correlation between Administradora Americana de and Cencosud, you can compare the effects of market volatilities on Administradora Americana and Cencosud 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 Administradora Americana with a short position of Cencosud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Administradora Americana and Cencosud.
Diversification Opportunities for Administradora Americana and Cencosud
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Administradora and Cencosud is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Administradora Americana de and Cencosud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencosud and Administradora Americana 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 Administradora Americana de are associated (or correlated) with Cencosud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencosud has no effect on the direction of Administradora Americana i.e., Administradora Americana and Cencosud go up and down completely randomly.
Pair Corralation between Administradora Americana and Cencosud
Assuming the 90 days trading horizon Administradora Americana de is expected to under-perform the Cencosud. But the stock apears to be less risky and, when comparing its historical volatility, Administradora Americana de is 1.86 times less risky than Cencosud. The stock trades about -0.24 of its potential returns per unit of risk. The Cencosud is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 219,000 in Cencosud on November 4, 2024 and sell it today you would earn a total of 31,000 from holding Cencosud or generate 14.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Administradora Americana de vs. Cencosud
Performance |
| Timeline |
| Administradora Americana |
| Cencosud |
Administradora Americana and Cencosud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Administradora Americana and Cencosud
The main advantage of trading using opposite Administradora Americana and Cencosud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Administradora Americana position performs unexpectedly, Cencosud 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 Cencosud will offset losses from the drop in Cencosud's long position.| Administradora Americana vs. Banco de Credito | Administradora Americana vs. LATAM Airlines Group | Administradora Americana vs. Multiexport Foods SA |
| Cencosud vs. Falabella | Cencosud vs. Empresas Copec SA | Cencosud vs. Sociedad Qumica y | Cencosud vs. Banco Santander Chile |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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