Correlation Between Parq Arauco and Plaza SA
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By analyzing existing cross correlation between Parq Arauco and Plaza SA, you can compare the effects of market volatilities on Parq Arauco and Plaza SA 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 Parq Arauco with a short position of Plaza SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parq Arauco and Plaza SA.
Diversification Opportunities for Parq Arauco and Plaza SA
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Parq and Plaza is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Parq Arauco and Plaza SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza SA and Parq Arauco 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 Parq Arauco are associated (or correlated) with Plaza SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza SA has no effect on the direction of Parq Arauco i.e., Parq Arauco and Plaza SA go up and down completely randomly.
Pair Corralation between Parq Arauco and Plaza SA
Assuming the 90 days trading horizon Parq Arauco is expected to generate 1.86 times less return on investment than Plaza SA. But when comparing it to its historical volatility, Parq Arauco is 1.15 times less risky than Plaza SA. It trades about 0.04 of its potential returns per unit of risk. Plaza SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 120,994 in Plaza SA on August 28, 2024 and sell it today you would earn a total of 39,506 from holding Plaza SA or generate 32.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Parq Arauco vs. Plaza SA
Performance |
| Timeline |
| Parq Arauco |
| Plaza SA |
Parq Arauco and Plaza SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parq Arauco and Plaza SA
The main advantage of trading using opposite Parq Arauco and Plaza SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parq Arauco position performs unexpectedly, Plaza SA 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 Plaza SA will offset losses from the drop in Plaza SA's long position.| Parq Arauco vs. Falabella | Parq Arauco vs. Cencosud | Parq Arauco vs. Ripley Corp | Parq Arauco vs. Empresas Copec SA |
| Plaza SA vs. Administradora Americana de | Plaza SA vs. Energia Latina SA | Plaza SA vs. Embotelladora Andina SA | Plaza SA vs. Salfacorp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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