Correlation Between Cencosud and Salfacorp
Specify exactly 2 symbols:
By analyzing existing cross correlation between Cencosud and Salfacorp, you can compare the effects of market volatilities on Cencosud 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 Cencosud with a short position of Salfacorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cencosud and Salfacorp.
Diversification Opportunities for Cencosud and Salfacorp
Very poor diversification
The 3 months correlation between Cencosud and Salfacorp is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cencosud and Salfacorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salfacorp 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 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 Cencosud i.e., Cencosud and Salfacorp go up and down completely randomly.
Pair Corralation between Cencosud and Salfacorp
Assuming the 90 days trading horizon Cencosud is expected to generate 1.1 times more return on investment than Salfacorp. However, Cencosud is 1.1 times more volatile than Salfacorp. It trades about 0.1 of its potential returns per unit of risk. Salfacorp is currently generating about 0.02 per unit of risk. If you would invest 176,700 in Cencosud on August 31, 2024 and sell it today you would earn a total of 28,300 from holding Cencosud or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cencosud vs. Salfacorp
Performance |
| Timeline |
| Cencosud |
| Salfacorp |
Cencosud and Salfacorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cencosud and Salfacorp
The main advantage of trading using opposite Cencosud and Salfacorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cencosud 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.The idea behind Cencosud and Salfacorp 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.| Salfacorp vs. Aguas Andinas SA | Salfacorp vs. Parq Arauco | Salfacorp vs. Enel Generacin Chile | Salfacorp vs. Sociedad Matriz SAAM |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |