Correlation Between Luz Del and Scotiabank Peru
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By analyzing existing cross correlation between Luz del Sur and Scotiabank Peru SAA, you can compare the effects of market volatilities on Luz Del and Scotiabank Peru 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 Luz Del with a short position of Scotiabank Peru. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luz Del and Scotiabank Peru.
Diversification Opportunities for Luz Del and Scotiabank Peru
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luz and Scotiabank is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Luz del Sur and Scotiabank Peru SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scotiabank Peru SAA and Luz Del 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 Luz del Sur are associated (or correlated) with Scotiabank Peru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scotiabank Peru SAA has no effect on the direction of Luz Del i.e., Luz Del and Scotiabank Peru go up and down completely randomly.
Pair Corralation between Luz Del and Scotiabank Peru
Assuming the 90 days trading horizon Luz del Sur is expected to under-perform the Scotiabank Peru. But the stock apears to be less risky and, when comparing its historical volatility, Luz del Sur is 5.75 times less risky than Scotiabank Peru. The stock trades about -0.12 of its potential returns per unit of risk. The Scotiabank Peru SAA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 901.00 in Scotiabank Peru SAA on October 24, 2024 and sell it today you would earn a total of 99.00 from holding Scotiabank Peru SAA or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 26.09% |
| Values | Daily Returns |
Luz del Sur vs. Scotiabank Peru SAA
Performance |
| Timeline |
| Luz del Sur |
| Scotiabank Peru SAA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Luz Del and Scotiabank Peru Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luz Del and Scotiabank Peru
The main advantage of trading using opposite Luz Del and Scotiabank Peru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luz Del position performs unexpectedly, Scotiabank Peru 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 Scotiabank Peru will offset losses from the drop in Scotiabank Peru's long position.The idea behind Luz del Sur and Scotiabank Peru SAA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Scotiabank Peru vs. InRetail Peru Corp | Scotiabank Peru vs. Banco de Credito | Scotiabank Peru vs. Bank of America |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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