Correlation Between Plaza SA and Cencosud
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By analyzing existing cross correlation between Plaza SA and Cencosud, you can compare the effects of market volatilities on Plaza SA and Cencosud 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 Plaza SA with a short position of Cencosud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plaza SA and Cencosud.
Diversification Opportunities for Plaza SA and Cencosud
Very poor diversification
The 3 months correlation between Plaza and Cencosud is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Plaza SA and Cencosud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencosud and Plaza 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 Plaza SA are associated (or correlated) with Cencosud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencosud has no effect on the direction of Plaza SA i.e., Plaza SA and Cencosud go up and down completely randomly.
Pair Corralation between Plaza SA and Cencosud
Assuming the 90 days trading horizon Plaza SA is expected to generate 1.11 times less return on investment than Cencosud. In addition to that, Plaza SA is 1.12 times more volatile than Cencosud. It trades about 0.07 of its total potential returns per unit of risk. Cencosud is currently generating about 0.09 per unit of volatility. If you would invest 137,813 in Cencosud on November 4, 2024 and sell it today you would earn a total of 112,187 from holding Cencosud or generate 81.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plaza SA vs. Cencosud
Performance |
| Timeline |
| Plaza SA |
| Cencosud |
Plaza SA and Cencosud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plaza SA and Cencosud
The main advantage of trading using opposite Plaza SA and Cencosud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plaza SA position performs unexpectedly, Cencosud 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 Cencosud will offset losses from the drop in Cencosud's long position.| Plaza SA vs. Aguas Andinas SA | Plaza SA vs. Parq Arauco | Plaza SA vs. Enel Generacin Chile | Plaza SA vs. Sociedad Matriz SAAM |
| Cencosud vs. Falabella | Cencosud vs. Empresas Copec SA | Cencosud vs. Sociedad Qumica y | Cencosud vs. Banco Santander Chile |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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