Correlation Between Aguas Andinas and Arrayan Acciones
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By analyzing existing cross correlation between Aguas Andinas SA and Arrayan Acciones Chilenas, you can compare the effects of market volatilities on Aguas Andinas and Arrayan Acciones 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 Arrayan Acciones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aguas Andinas and Arrayan Acciones.
Diversification Opportunities for Aguas Andinas and Arrayan Acciones
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aguas and Arrayan is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Aguas Andinas SA and Arrayan Acciones Chilenas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrayan Acciones Chilenas 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 Arrayan Acciones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrayan Acciones Chilenas has no effect on the direction of Aguas Andinas i.e., Aguas Andinas and Arrayan Acciones go up and down completely randomly.
Pair Corralation between Aguas Andinas and Arrayan Acciones
Assuming the 90 days trading horizon Aguas Andinas SA is expected to generate 1.12 times more return on investment than Arrayan Acciones. However, Aguas Andinas is 1.12 times more volatile than Arrayan Acciones Chilenas. It trades about 0.08 of its potential returns per unit of risk. Arrayan Acciones Chilenas is currently generating about 0.02 per unit of risk. If you would invest 18,135 in Aguas Andinas SA on August 30, 2024 and sell it today you would earn a total of 11,384 from holding Aguas Andinas SA or generate 62.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 48.88% |
| Values | Daily Returns |
Aguas Andinas SA vs. Arrayan Acciones Chilenas
Performance |
| Timeline |
| Aguas Andinas SA |
| Arrayan Acciones Chilenas |
Aguas Andinas and Arrayan Acciones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aguas Andinas and Arrayan Acciones
The main advantage of trading using opposite Aguas Andinas and Arrayan Acciones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aguas Andinas position performs unexpectedly, Arrayan Acciones 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 Arrayan Acciones will offset losses from the drop in Arrayan Acciones' long position.| Aguas Andinas vs. Multiexport Foods SA | Aguas Andinas vs. LATAM Airlines Group | Aguas Andinas vs. Banco de Credito |
| Arrayan Acciones vs. Multiexport Foods SA | Arrayan Acciones vs. LATAM Airlines Group | Arrayan Acciones vs. Banco de Credito |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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