Correlation Between Empresa Nacional and Holding Burstil
Can any of the company-specific risk be diversified away by investing in both Empresa Nacional and Holding Burstil at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Empresa Nacional and Holding Burstil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empresa Nacional de and Holding Burstil Regional, you can compare the effects of market volatilities on Empresa Nacional and Holding Burstil 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 Empresa Nacional with a short position of Holding Burstil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empresa Nacional and Holding Burstil.
Diversification Opportunities for Empresa Nacional and Holding Burstil
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Empresa and Holding is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Empresa Nacional de and Holding Burstil Regional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holding Burstil Regional and Empresa Nacional 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 Empresa Nacional de are associated (or correlated) with Holding Burstil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holding Burstil Regional has no effect on the direction of Empresa Nacional i.e., Empresa Nacional and Holding Burstil go up and down completely randomly.
Pair Corralation between Empresa Nacional and Holding Burstil
Assuming the 90 days trading horizon Empresa Nacional de is expected to under-perform the Holding Burstil. In addition to that, Empresa Nacional is 1.8 times more volatile than Holding Burstil Regional. It trades about -0.11 of its total potential returns per unit of risk. Holding Burstil Regional is currently generating about -0.12 per unit of volatility. If you would invest 390,000 in Holding Burstil Regional on September 14, 2024 and sell it today you would lose (5,510) from holding Holding Burstil Regional or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empresa Nacional de vs. Holding Burstil Regional
Performance |
| Timeline |
| Empresa Nacional |
| Holding Burstil Regional |
Empresa Nacional and Holding Burstil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empresa Nacional and Holding Burstil
The main advantage of trading using opposite Empresa Nacional and Holding Burstil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empresa Nacional position performs unexpectedly, Holding Burstil 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 Holding Burstil will offset losses from the drop in Holding Burstil's long position.| Empresa Nacional vs. Cencosud | Empresa Nacional vs. Empresas Copec SA | Empresa Nacional vs. Falabella | Empresa Nacional vs. Empresas CMPC |
| Holding Burstil vs. Aguas Andinas SA | Holding Burstil vs. Parq Arauco | Holding Burstil vs. Enel Generacin Chile | Holding Burstil 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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