Correlation Between Aguas Andinas and Colbun
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By analyzing existing cross correlation between Aguas Andinas SA and Colbun, you can compare the effects of market volatilities on Aguas Andinas and Colbun 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 Colbun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aguas Andinas and Colbun.
Diversification Opportunities for Aguas Andinas and Colbun
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aguas and Colbun is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Aguas Andinas SA and Colbun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colbun 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 Colbun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colbun has no effect on the direction of Aguas Andinas i.e., Aguas Andinas and Colbun go up and down completely randomly.
Pair Corralation between Aguas Andinas and Colbun
Assuming the 90 days trading horizon Aguas Andinas SA is expected to under-perform the Colbun. In addition to that, Aguas Andinas is 1.1 times more volatile than Colbun. It trades about -0.09 of its total potential returns per unit of risk. Colbun is currently generating about 0.52 per unit of volatility. If you would invest 11,230 in Colbun on September 20, 2024 and sell it today you would earn a total of 1,066 from holding Colbun or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aguas Andinas SA vs. Colbun
Performance |
| Timeline |
| Aguas Andinas SA |
| Colbun |
Aguas Andinas and Colbun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aguas Andinas and Colbun
The main advantage of trading using opposite Aguas Andinas and Colbun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aguas Andinas position performs unexpectedly, Colbun 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 Colbun will offset losses from the drop in Colbun's long position.| Aguas Andinas vs. Parq Arauco | Aguas Andinas vs. Enel Generacin Chile | Aguas Andinas vs. Sociedad Matriz SAAM | Aguas Andinas vs. Empresa Nacional de |
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 Stocks Directory module to find actively traded stocks across global markets.
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