Correlation Between Cencosud and Colbun
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By analyzing existing cross correlation between Cencosud and Colbun, you can compare the effects of market volatilities on Cencosud and Colbun 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 Cencosud with a short position of Colbun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cencosud and Colbun.
Diversification Opportunities for Cencosud and Colbun
Very good diversification
The 3 months correlation between Cencosud and Colbun is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cencosud and Colbun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colbun and Cencosud 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 Cencosud are associated (or correlated) with Colbun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colbun has no effect on the direction of Cencosud i.e., Cencosud and Colbun go up and down completely randomly.
Pair Corralation between Cencosud and Colbun
Assuming the 90 days trading horizon Cencosud is expected to generate 1.38 times more return on investment than Colbun. However, Cencosud is 1.38 times more volatile than Colbun. It trades about 0.1 of its potential returns per unit of risk. Colbun is currently generating about 0.01 per unit of risk. If you would invest 184,390 in Cencosud on August 28, 2024 and sell it today you would earn a total of 14,610 from holding Cencosud or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cencosud vs. Colbun
Performance |
| Timeline |
| Cencosud |
| Colbun |
Cencosud and Colbun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cencosud and Colbun
The main advantage of trading using opposite Cencosud and Colbun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cencosud position performs unexpectedly, Colbun 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 Colbun will offset losses from the drop in Colbun's long position.| Cencosud vs. Empresas Copec SA | Cencosud vs. LATAM Airlines Group | Cencosud vs. Sociedad Qumica y | Cencosud vs. Banco Santander Chile |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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