Correlation Between Aguas Andinas and Cementos Bio
Specify exactly 2 symbols:
By analyzing existing cross correlation between Aguas Andinas SA and Cementos Bio B, you can compare the effects of market volatilities on Aguas Andinas and Cementos Bio 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 Aguas Andinas with a short position of Cementos Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aguas Andinas and Cementos Bio.
Diversification Opportunities for Aguas Andinas and Cementos Bio
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aguas and Cementos is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aguas Andinas SA and Cementos Bio B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cementos Bio B and Aguas Andinas 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 Aguas Andinas SA are associated (or correlated) with Cementos Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cementos Bio B has no effect on the direction of Aguas Andinas i.e., Aguas Andinas and Cementos Bio go up and down completely randomly.
Pair Corralation between Aguas Andinas and Cementos Bio
Assuming the 90 days trading horizon Aguas Andinas is expected to generate 29.44 times less return on investment than Cementos Bio. But when comparing it to its historical volatility, Aguas Andinas SA is 12.13 times less risky than Cementos Bio. It trades about 0.13 of its potential returns per unit of risk. Cementos Bio B is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 69,795 in Cementos Bio B on August 30, 2024 and sell it today you would earn a total of 70,205 from holding Cementos Bio B or generate 100.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 60.0% |
| Values | Daily Returns |
Aguas Andinas SA vs. Cementos Bio B
Performance |
| Timeline |
| Aguas Andinas SA |
| Cementos Bio B |
Aguas Andinas and Cementos Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aguas Andinas and Cementos Bio
The main advantage of trading using opposite Aguas Andinas and Cementos Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aguas Andinas position performs unexpectedly, Cementos Bio 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 Cementos Bio will offset losses from the drop in Cementos Bio's long position.| Aguas Andinas vs. Multiexport Foods SA | Aguas Andinas vs. LATAM Airlines Group | Aguas Andinas vs. Banco de Credito |
| Cementos Bio vs. Cementos Argos SA | Cementos Bio vs. Aguas Andinas SA | Cementos Bio vs. Parq Arauco | Cementos Bio vs. Enel Generacin 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |