Correlation Between Longvie SA and Embotelladora Andina
Can any of the company-specific risk be diversified away by investing in both Longvie SA and Embotelladora Andina 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 Longvie SA and Embotelladora Andina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longvie SA and Embotelladora Andina SA, you can compare the effects of market volatilities on Longvie SA and Embotelladora Andina 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 Longvie SA with a short position of Embotelladora Andina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longvie SA and Embotelladora Andina.
Diversification Opportunities for Longvie SA and Embotelladora Andina
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Longvie and Embotelladora is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Longvie SA and Embotelladora Andina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embotelladora Andina and Longvie SA 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 Longvie SA are associated (or correlated) with Embotelladora Andina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embotelladora Andina has no effect on the direction of Longvie SA i.e., Longvie SA and Embotelladora Andina go up and down completely randomly.
Pair Corralation between Longvie SA and Embotelladora Andina
Assuming the 90 days trading horizon Longvie SA is expected to generate 0.85 times more return on investment than Embotelladora Andina. However, Longvie SA is 1.18 times less risky than Embotelladora Andina. It trades about 0.1 of its potential returns per unit of risk. Embotelladora Andina SA is currently generating about -0.01 per unit of risk. If you would invest 3,230 in Longvie SA on September 1, 2024 and sell it today you would earn a total of 1,355 from holding Longvie SA or generate 41.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.0% |
| Values | Daily Returns |
Longvie SA vs. Embotelladora Andina SA
Performance |
| Timeline |
| Longvie SA |
| Embotelladora Andina |
Longvie SA and Embotelladora Andina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longvie SA and Embotelladora Andina
The main advantage of trading using opposite Longvie SA and Embotelladora Andina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longvie SA position performs unexpectedly, Embotelladora Andina 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 Embotelladora Andina will offset losses from the drop in Embotelladora Andina's long position.| Longvie SA vs. Fiplasto SA | Longvie SA vs. American Express Co | Longvie SA vs. United States Steel | Longvie SA vs. Pfizer Inc |
| Embotelladora Andina vs. Apple Inc DRC | Embotelladora Andina vs. Alphabet Inc Class A CEDEAR | Embotelladora Andina vs. Amazon Inc | Embotelladora Andina vs. Johnson Johnson Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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