Correlation Between Embotelladora Andina and LATAM Airlines
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By analyzing existing cross correlation between Embotelladora Andina SA and LATAM Airlines Group, you can compare the effects of market volatilities on Embotelladora Andina and LATAM Airlines 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 Embotelladora Andina with a short position of LATAM Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embotelladora Andina and LATAM Airlines.
Diversification Opportunities for Embotelladora Andina and LATAM Airlines
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Embotelladora and LATAM is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Embotelladora Andina SA and LATAM Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LATAM Airlines Group and Embotelladora Andina 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 Embotelladora Andina SA are associated (or correlated) with LATAM Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LATAM Airlines Group has no effect on the direction of Embotelladora Andina i.e., Embotelladora Andina and LATAM Airlines go up and down completely randomly.
Pair Corralation between Embotelladora Andina and LATAM Airlines
Assuming the 90 days trading horizon Embotelladora Andina SA is expected to under-perform the LATAM Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Embotelladora Andina SA is 1.6 times less risky than LATAM Airlines. The stock trades about -0.11 of its potential returns per unit of risk. The LATAM Airlines Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,185 in LATAM Airlines Group on August 28, 2024 and sell it today you would earn a total of 130.00 from holding LATAM Airlines Group or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embotelladora Andina SA vs. LATAM Airlines Group
Performance |
| Timeline |
| Embotelladora Andina |
| LATAM Airlines Group |
Embotelladora Andina and LATAM Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embotelladora Andina and LATAM Airlines
The main advantage of trading using opposite Embotelladora Andina and LATAM Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embotelladora Andina position performs unexpectedly, LATAM Airlines 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 LATAM Airlines will offset losses from the drop in LATAM Airlines' long position.| Embotelladora Andina vs. Administradora Americana de | Embotelladora Andina vs. Las Condes | Embotelladora Andina vs. Multiexport Foods SA | Embotelladora Andina vs. Energia Latina SA |
| LATAM Airlines vs. Falabella | LATAM Airlines vs. Cencosud | LATAM Airlines vs. Enjoy SA | LATAM Airlines vs. Sociedad Qumica y |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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