Correlation Between Cencosud and Parq Arauco
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By analyzing existing cross correlation between Cencosud and Parq Arauco, you can compare the effects of market volatilities on Cencosud and Parq Arauco 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 Parq Arauco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cencosud and Parq Arauco.
Diversification Opportunities for Cencosud and Parq Arauco
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cencosud and Parq is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cencosud and Parq Arauco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parq Arauco 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 Parq Arauco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parq Arauco has no effect on the direction of Cencosud i.e., Cencosud and Parq Arauco go up and down completely randomly.
Pair Corralation between Cencosud and Parq Arauco
Assuming the 90 days trading horizon Cencosud is expected to generate 1.06 times more return on investment than Parq Arauco. However, Cencosud is 1.06 times more volatile than Parq Arauco. It trades about -0.07 of its potential returns per unit of risk. Parq Arauco is currently generating about -0.18 per unit of risk. If you would invest 203,000 in Cencosud on August 27, 2024 and sell it today you would lose (4,000) from holding Cencosud or give up 1.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cencosud vs. Parq Arauco
Performance |
| Timeline |
| Cencosud |
| Parq Arauco |
Cencosud and Parq Arauco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cencosud and Parq Arauco
The main advantage of trading using opposite Cencosud and Parq Arauco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cencosud position performs unexpectedly, Parq Arauco 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 Parq Arauco will offset losses from the drop in Parq Arauco's long position.| Cencosud vs. Empresas Copec SA | Cencosud vs. LATAM Airlines Group | Cencosud vs. Sociedad Qumica y | Cencosud vs. Banco Santander Chile |
| Parq Arauco vs. Falabella | Parq Arauco vs. Cencosud | Parq Arauco vs. Ripley Corp | Parq Arauco 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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