Correlation Between Sociedad Punta and LATAM Airlines
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By analyzing existing cross correlation between Sociedad Punta del and LATAM Airlines Group, you can compare the effects of market volatilities on Sociedad Punta and LATAM Airlines 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 Sociedad Punta with a short position of LATAM Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sociedad Punta and LATAM Airlines.
Diversification Opportunities for Sociedad Punta and LATAM Airlines
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sociedad and LATAM is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sociedad Punta del and LATAM Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LATAM Airlines Group and Sociedad Punta 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 Sociedad Punta del are associated (or correlated) with LATAM Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LATAM Airlines Group has no effect on the direction of Sociedad Punta i.e., Sociedad Punta and LATAM Airlines go up and down completely randomly.
Pair Corralation between Sociedad Punta and LATAM Airlines
Assuming the 90 days trading horizon Sociedad Punta del is expected to under-perform the LATAM Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Sociedad Punta del is 4.18 times less risky than LATAM Airlines. The stock trades about -0.32 of its potential returns per unit of risk. The LATAM Airlines Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,324 in LATAM Airlines Group on September 12, 2024 and sell it today you would earn a total of 75.00 from holding LATAM Airlines Group or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Sociedad Punta del vs. LATAM Airlines Group
Performance |
| Timeline |
| Sociedad Punta del |
| LATAM Airlines Group |
Sociedad Punta and LATAM Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sociedad Punta and LATAM Airlines
The main advantage of trading using opposite Sociedad Punta and LATAM Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sociedad Punta position performs unexpectedly, LATAM Airlines 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 LATAM Airlines will offset losses from the drop in LATAM Airlines' long position.| Sociedad Punta vs. Sociedad Matriz SAAM | Sociedad Punta vs. Sociedad Qumica y | Sociedad Punta vs. Sociedad Qumica y |
| LATAM Airlines vs. Falabella | LATAM Airlines vs. Cencosud | LATAM Airlines vs. Enjoy SA | LATAM Airlines vs. Sociedad Qumica y |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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