Correlation Between Aguas Andinas and Inversiones Aguas
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By analyzing existing cross correlation between Aguas Andinas SA and Inversiones Aguas Metropolitanas, you can compare the effects of market volatilities on Aguas Andinas and Inversiones Aguas 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 Inversiones Aguas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aguas Andinas and Inversiones Aguas.
Diversification Opportunities for Aguas Andinas and Inversiones Aguas
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aguas and Inversiones is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aguas Andinas SA and Inversiones Aguas Metropolitan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inversiones Aguas 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 Inversiones Aguas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inversiones Aguas has no effect on the direction of Aguas Andinas i.e., Aguas Andinas and Inversiones Aguas go up and down completely randomly.
Pair Corralation between Aguas Andinas and Inversiones Aguas
Assuming the 90 days trading horizon Aguas Andinas is expected to generate 1.23 times less return on investment than Inversiones Aguas. In addition to that, Aguas Andinas is 1.17 times more volatile than Inversiones Aguas Metropolitanas. It trades about 0.14 of its total potential returns per unit of risk. Inversiones Aguas Metropolitanas is currently generating about 0.21 per unit of volatility. If you would invest 68,500 in Inversiones Aguas Metropolitanas on September 19, 2024 and sell it today you would earn a total of 4,813 from holding Inversiones Aguas Metropolitanas or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aguas Andinas SA vs. Inversiones Aguas Metropolitan
Performance |
| Timeline |
| Aguas Andinas SA |
| Inversiones Aguas |
Aguas Andinas and Inversiones Aguas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aguas Andinas and Inversiones Aguas
The main advantage of trading using opposite Aguas Andinas and Inversiones Aguas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aguas Andinas position performs unexpectedly, Inversiones Aguas 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 Inversiones Aguas will offset losses from the drop in Inversiones Aguas' 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 |
| Inversiones Aguas vs. Aguas Andinas SA | Inversiones Aguas vs. Engie Energia Chile | Inversiones Aguas vs. Colbun | Inversiones Aguas vs. Enel Chile SA |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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