Correlation Between Cuprum and Aguas Andinas
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By analyzing existing cross correlation between Cuprum and Aguas Andinas SA, you can compare the effects of market volatilities on Cuprum and Aguas Andinas 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 Cuprum with a short position of Aguas Andinas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuprum and Aguas Andinas.
Diversification Opportunities for Cuprum and Aguas Andinas
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cuprum and Aguas is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cuprum and Aguas Andinas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aguas Andinas SA and Cuprum 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 Cuprum are associated (or correlated) with Aguas Andinas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aguas Andinas SA has no effect on the direction of Cuprum i.e., Cuprum and Aguas Andinas go up and down completely randomly.
Pair Corralation between Cuprum and Aguas Andinas
Assuming the 90 days trading horizon Cuprum is expected to generate 0.71 times more return on investment than Aguas Andinas. However, Cuprum is 1.41 times less risky than Aguas Andinas. It trades about 0.4 of its potential returns per unit of risk. Aguas Andinas SA is currently generating about 0.19 per unit of risk. If you would invest 4,684 in Cuprum on September 3, 2024 and sell it today you would earn a total of 556.00 from holding Cuprum or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cuprum vs. Aguas Andinas SA
Performance |
| Timeline |
| Cuprum |
| Aguas Andinas SA |
Cuprum and Aguas Andinas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuprum and Aguas Andinas
The main advantage of trading using opposite Cuprum and Aguas Andinas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuprum position performs unexpectedly, Aguas Andinas 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 Aguas Andinas will offset losses from the drop in Aguas Andinas' long position.The idea behind Cuprum and Aguas Andinas SA 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.| Aguas Andinas vs. Embotelladora Andina SA | Aguas Andinas vs. Administradora Americana de | Aguas Andinas vs. Salfacorp | Aguas Andinas vs. Vina Concha To |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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