Correlation Between Las Condes and Masisa
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By analyzing existing cross correlation between Las Condes and Masisa, you can compare the effects of market volatilities on Las Condes and Masisa 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 Las Condes with a short position of Masisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Las Condes and Masisa.
Diversification Opportunities for Las Condes and Masisa
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Las and Masisa is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Las Condes and Masisa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masisa and Las Condes 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 Las Condes are associated (or correlated) with Masisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masisa has no effect on the direction of Las Condes i.e., Las Condes and Masisa go up and down completely randomly.
Pair Corralation between Las Condes and Masisa
Assuming the 90 days trading horizon Las Condes is expected to under-perform the Masisa. In addition to that, Las Condes is 2.41 times more volatile than Masisa. It trades about -0.18 of its total potential returns per unit of risk. Masisa is currently generating about -0.03 per unit of volatility. If you would invest 1,649 in Masisa on August 24, 2024 and sell it today you would lose (9.00) from holding Masisa or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.0% |
| Values | Daily Returns |
Las Condes vs. Masisa
Performance |
| Timeline |
| Las Condes |
| Masisa |
Las Condes and Masisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Las Condes and Masisa
The main advantage of trading using opposite Las Condes and Masisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Las Condes position performs unexpectedly, Masisa 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 Masisa will offset losses from the drop in Masisa's long position.| Las Condes vs. Embotelladora Andina SA | Las Condes vs. Administradora Americana de | Las Condes vs. Multiexport Foods SA | Las Condes vs. Energia Latina SA |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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