Correlation Between Masisa and Sociedad Matriz
Can any of the company-specific risk be diversified away by investing in both Masisa and Sociedad Matriz 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 Masisa and Sociedad Matriz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Masisa and Sociedad Matriz SAAM, you can compare the effects of market volatilities on Masisa and Sociedad Matriz 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 Masisa with a short position of Sociedad Matriz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masisa and Sociedad Matriz.
Diversification Opportunities for Masisa and Sociedad Matriz
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Masisa and Sociedad is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Masisa and Sociedad Matriz SAAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Matriz SAAM and Masisa 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 Masisa are associated (or correlated) with Sociedad Matriz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Matriz SAAM has no effect on the direction of Masisa i.e., Masisa and Sociedad Matriz go up and down completely randomly.
Pair Corralation between Masisa and Sociedad Matriz
Assuming the 90 days trading horizon Masisa is expected to under-perform the Sociedad Matriz. In addition to that, Masisa is 1.61 times more volatile than Sociedad Matriz SAAM. It trades about -0.01 of its total potential returns per unit of risk. Sociedad Matriz SAAM is currently generating about 0.04 per unit of volatility. If you would invest 8,268 in Sociedad Matriz SAAM on August 27, 2024 and sell it today you would earn a total of 2,132 from holding Sociedad Matriz SAAM or generate 25.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.77% |
| Values | Daily Returns |
Masisa vs. Sociedad Matriz SAAM
Performance |
| Timeline |
| Masisa |
| Sociedad Matriz SAAM |
Masisa and Sociedad Matriz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Masisa and Sociedad Matriz
The main advantage of trading using opposite Masisa and Sociedad Matriz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Masisa position performs unexpectedly, Sociedad Matriz 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 Sociedad Matriz will offset losses from the drop in Sociedad Matriz's long position.| Masisa vs. Administradora Americana de | Masisa vs. Energia Latina SA | Masisa vs. Embotelladora Andina SA | Masisa vs. Salfacorp |
| Sociedad Matriz vs. Vapores | Sociedad Matriz vs. Empresas CMPC | Sociedad Matriz vs. Colbun | Sociedad Matriz vs. Empresas Copec 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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