Correlation Between Compania and Compania Electrica
Can any of the company-specific risk be diversified away by investing in both Compania and Compania Electrica 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 Compania and Compania Electrica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania De Inversiones and Compania Electrica Del, you can compare the effects of market volatilities on Compania and Compania Electrica 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 Compania with a short position of Compania Electrica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Compania Electrica.
Diversification Opportunities for Compania and Compania Electrica
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compania and Compania is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compania De Inversiones and Compania Electrica Del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Electrica Del and Compania 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 Compania De Inversiones are associated (or correlated) with Compania Electrica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Electrica Del has no effect on the direction of Compania i.e., Compania and Compania Electrica go up and down completely randomly.
Pair Corralation between Compania and Compania Electrica
If you would invest (100.00) in Compania Electrica Del on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Compania Electrica Del or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania De Inversiones vs. Compania Electrica Del
Performance |
| Timeline |
| Compania De Inversiones |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Compania Electrica Del |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Compania and Compania Electrica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania and Compania Electrica
The main advantage of trading using opposite Compania and Compania Electrica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania position performs unexpectedly, Compania Electrica 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 Compania Electrica will offset losses from the drop in Compania Electrica's long position.| Compania vs. Compania Cervecerias Unidas | Compania vs. Compania General de | Compania vs. Aguas Andinas SA | Compania vs. Parq Arauco |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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