Correlation Between LATAM Airlines and Las Condes
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By analyzing existing cross correlation between LATAM Airlines Group and Las Condes, you can compare the effects of market volatilities on LATAM Airlines and Las Condes 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 LATAM Airlines with a short position of Las Condes. Check out your portfolio center. Please also check ongoing floating volatility patterns of LATAM Airlines and Las Condes.
Diversification Opportunities for LATAM Airlines and Las Condes
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LATAM and Las is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding LATAM Airlines Group and Las Condes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Condes and LATAM Airlines 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 LATAM Airlines Group are associated (or correlated) with Las Condes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Condes has no effect on the direction of LATAM Airlines i.e., LATAM Airlines and Las Condes go up and down completely randomly.
Pair Corralation between LATAM Airlines and Las Condes
Assuming the 90 days trading horizon LATAM Airlines Group is expected to generate 0.47 times more return on investment than Las Condes. However, LATAM Airlines Group is 2.14 times less risky than Las Condes. It trades about 0.12 of its potential returns per unit of risk. Las Condes is currently generating about -0.14 per unit of risk. If you would invest 1,299 in LATAM Airlines Group on September 2, 2024 and sell it today you would earn a total of 51.00 from holding LATAM Airlines Group or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
LATAM Airlines Group vs. Las Condes
Performance |
| Timeline |
| LATAM Airlines Group |
| Las Condes |
LATAM Airlines and Las Condes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LATAM Airlines and Las Condes
The main advantage of trading using opposite LATAM Airlines and Las Condes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LATAM Airlines position performs unexpectedly, Las Condes 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 Las Condes will offset losses from the drop in Las Condes' long position.| LATAM Airlines vs. Falabella | LATAM Airlines vs. Cencosud | LATAM Airlines vs. Enjoy SA | LATAM Airlines vs. Sociedad Qumica y |
| Las Condes vs. Banco de Credito | Las Condes vs. Multiexport Foods SA | Las Condes vs. LATAM Airlines Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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