Correlation Between Quinenco and Cencosud
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By analyzing existing cross correlation between Quinenco and Cencosud, you can compare the effects of market volatilities on Quinenco 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 Quinenco with a short position of Cencosud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quinenco and Cencosud.
Diversification Opportunities for Quinenco and Cencosud
Weak diversification
The 3 months correlation between Quinenco and Cencosud is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Quinenco and Cencosud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencosud and Quinenco 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 Quinenco 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 Quinenco i.e., Quinenco and Cencosud go up and down completely randomly.
Pair Corralation between Quinenco and Cencosud
Assuming the 90 days trading horizon Quinenco is expected to generate 1.16 times more return on investment than Cencosud. However, Quinenco is 1.16 times more volatile than Cencosud. It trades about 0.08 of its potential returns per unit of risk. Cencosud is currently generating about 0.06 per unit of risk. If you would invest 230,015 in Quinenco on August 26, 2024 and sell it today you would earn a total of 79,985 from holding Quinenco or generate 34.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quinenco vs. Cencosud
Performance |
| Timeline |
| Quinenco |
| Cencosud |
Quinenco and Cencosud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quinenco and Cencosud
The main advantage of trading using opposite Quinenco and Cencosud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quinenco 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.The idea behind Quinenco and Cencosud 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.| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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