Correlation Between Compania and Luz Del
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By analyzing existing cross correlation between Compania de Minas and Luz del Sur, you can compare the effects of market volatilities on Compania and Luz Del 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 Compania with a short position of Luz Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Luz Del.
Diversification Opportunities for Compania and Luz Del
Very weak diversification
The 3 months correlation between Compania and Luz is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Compania de Minas and Luz del Sur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luz del Sur and Compania 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 Compania de Minas are associated (or correlated) with Luz Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luz del Sur has no effect on the direction of Compania i.e., Compania and Luz Del go up and down completely randomly.
Pair Corralation between Compania and Luz Del
Assuming the 90 days trading horizon Compania de Minas is expected to under-perform the Luz Del. In addition to that, Compania is 2.71 times more volatile than Luz del Sur. It trades about -0.08 of its total potential returns per unit of risk. Luz del Sur is currently generating about 0.11 per unit of volatility. If you would invest 1,560 in Luz del Sur on September 12, 2024 and sell it today you would earn a total of 90.00 from holding Luz del Sur or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.87% |
| Values | Daily Returns |
Compania de Minas vs. Luz del Sur
Performance |
| Timeline |
| Compania de Minas |
| Luz del Sur |
Compania and Luz Del Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania and Luz Del
The main advantage of trading using opposite Compania and Luz Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania position performs unexpectedly, Luz Del 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 Luz Del will offset losses from the drop in Luz Del's long position.| Compania vs. Nexa Resources Peru | Compania vs. Citigroup | Compania vs. Compania Minera Poderosa | Compania vs. Bank of America |
| Luz Del vs. Nexa Resources Peru | Luz Del vs. Citigroup | Luz Del vs. Compania de Minas | Luz Del vs. Compania Minera Poderosa |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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