Correlation Between Falabella and Empresa Nacional
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By analyzing existing cross correlation between Falabella and Empresa Nacional de, you can compare the effects of market volatilities on Falabella and Empresa Nacional 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 Falabella with a short position of Empresa Nacional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falabella and Empresa Nacional.
Diversification Opportunities for Falabella and Empresa Nacional
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Falabella and Empresa is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Falabella and Empresa Nacional de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empresa Nacional and Falabella 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 Falabella are associated (or correlated) with Empresa Nacional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empresa Nacional has no effect on the direction of Falabella i.e., Falabella and Empresa Nacional go up and down completely randomly.
Pair Corralation between Falabella and Empresa Nacional
Assuming the 90 days trading horizon Falabella is expected to generate 1.47 times more return on investment than Empresa Nacional. However, Falabella is 1.47 times more volatile than Empresa Nacional de. It trades about -0.13 of its potential returns per unit of risk. Empresa Nacional de is currently generating about -0.3 per unit of risk. If you would invest 350,300 in Falabella on August 27, 2024 and sell it today you would lose (13,800) from holding Falabella or give up 3.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falabella vs. Empresa Nacional de
Performance |
| Timeline |
| Falabella |
| Empresa Nacional |
Falabella and Empresa Nacional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falabella and Empresa Nacional
The main advantage of trading using opposite Falabella and Empresa Nacional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falabella position performs unexpectedly, Empresa Nacional 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 Empresa Nacional will offset losses from the drop in Empresa Nacional's long position.| Falabella vs. Empresas Copec SA | Falabella vs. LATAM Airlines Group | Falabella vs. Sociedad Qumica y | Falabella vs. Banco Santander Chile |
| Empresa Nacional vs. Cencosud | Empresa Nacional vs. Empresas Copec SA | Empresa Nacional vs. Falabella | Empresa Nacional vs. Empresas CMPC |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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