Correlation Between Aguas Andinas and Invercap
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By analyzing existing cross correlation between Aguas Andinas SA and Invercap, you can compare the effects of market volatilities on Aguas Andinas and Invercap 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 Invercap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aguas Andinas and Invercap.
Diversification Opportunities for Aguas Andinas and Invercap
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aguas and Invercap is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aguas Andinas SA and Invercap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invercap 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 Invercap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invercap has no effect on the direction of Aguas Andinas i.e., Aguas Andinas and Invercap go up and down completely randomly.
Pair Corralation between Aguas Andinas and Invercap
Assuming the 90 days trading horizon Aguas Andinas SA is expected to generate 1.25 times more return on investment than Invercap. However, Aguas Andinas is 1.25 times more volatile than Invercap. It trades about 0.22 of its potential returns per unit of risk. Invercap is currently generating about -0.13 per unit of risk. If you would invest 26,629 in Aguas Andinas SA on November 6, 2024 and sell it today you would earn a total of 4,965 from holding Aguas Andinas SA or generate 18.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aguas Andinas SA vs. Invercap
Performance |
| Timeline |
| Aguas Andinas SA |
| Invercap |
Aguas Andinas and Invercap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aguas Andinas and Invercap
The main advantage of trading using opposite Aguas Andinas and Invercap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aguas Andinas position performs unexpectedly, Invercap 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 Invercap will offset losses from the drop in Invercap's long position.| Aguas Andinas vs. LATAM Airlines Group | Aguas Andinas vs. Banco de Credito | Aguas Andinas vs. Multiexport Foods 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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