Correlation Between CAP SA and Falabella
Specify exactly 2 symbols:
By analyzing existing cross correlation between CAP SA and Falabella, you can compare the effects of market volatilities on CAP SA and Falabella 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 CAP SA with a short position of Falabella. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP SA and Falabella.
Diversification Opportunities for CAP SA and Falabella
Poor diversification
The 3 months correlation between CAP and Falabella is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CAP SA and Falabella in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falabella and CAP SA 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 CAP SA are associated (or correlated) with Falabella. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falabella has no effect on the direction of CAP SA i.e., CAP SA and Falabella go up and down completely randomly.
Pair Corralation between CAP SA and Falabella
Assuming the 90 days trading horizon CAP SA is expected to under-perform the Falabella. In addition to that, CAP SA is 1.16 times more volatile than Falabella. It trades about -0.23 of its total potential returns per unit of risk. Falabella is currently generating about -0.11 per unit of volatility. If you would invest 345,100 in Falabella on August 31, 2024 and sell it today you would lose (10,900) from holding Falabella or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAP SA vs. Falabella
Performance |
| Timeline |
| CAP SA |
| Falabella |
CAP SA and Falabella Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP SA and Falabella
The main advantage of trading using opposite CAP SA and Falabella positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP SA position performs unexpectedly, Falabella 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 Falabella will offset losses from the drop in Falabella's long position.The idea behind CAP SA and Falabella pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Falabella vs. Cencosud | Falabella vs. Empresas Copec SA | Falabella vs. LATAM Airlines Group | Falabella 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stocks Directory Find actively traded stocks across global markets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |