Correlation Between Banco De and Salfacorp
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By analyzing existing cross correlation between Banco de Credito and Salfacorp, you can compare the effects of market volatilities on Banco De and Salfacorp 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 Banco De with a short position of Salfacorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and Salfacorp.
Diversification Opportunities for Banco De and Salfacorp
Poor diversification
The 3 months correlation between Banco and Salfacorp is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Banco de Credito and Salfacorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salfacorp and Banco De 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 Banco de Credito are associated (or correlated) with Salfacorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salfacorp has no effect on the direction of Banco De i.e., Banco De and Salfacorp go up and down completely randomly.
Pair Corralation between Banco De and Salfacorp
Assuming the 90 days trading horizon Banco De is expected to generate 1.17 times less return on investment than Salfacorp. But when comparing it to its historical volatility, Banco de Credito is 1.01 times less risky than Salfacorp. It trades about 0.08 of its potential returns per unit of risk. Salfacorp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 43,046 in Salfacorp on September 20, 2024 and sell it today you would earn a total of 12,738 from holding Salfacorp or generate 29.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco de Credito vs. Salfacorp
Performance |
| Timeline |
| Banco de Credito |
| Salfacorp |
Banco De and Salfacorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and Salfacorp
The main advantage of trading using opposite Banco De and Salfacorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De position performs unexpectedly, Salfacorp 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 Salfacorp will offset losses from the drop in Salfacorp's long position.| Banco De vs. Banco Santander Chile | Banco De vs. Banco de Chile | Banco De vs. Falabella | Banco De vs. Empresas Copec 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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