Correlation Between Grupo Security and Aguas Andinas
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By analyzing existing cross correlation between Grupo Security and Aguas Andinas SA, you can compare the effects of market volatilities on Grupo Security and Aguas Andinas 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 Grupo Security with a short position of Aguas Andinas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Security and Aguas Andinas.
Diversification Opportunities for Grupo Security and Aguas Andinas
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grupo and Aguas is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Security and Aguas Andinas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aguas Andinas SA and Grupo Security 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 Grupo Security are associated (or correlated) with Aguas Andinas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aguas Andinas SA has no effect on the direction of Grupo Security i.e., Grupo Security and Aguas Andinas go up and down completely randomly.
Pair Corralation between Grupo Security and Aguas Andinas
Assuming the 90 days trading horizon Grupo Security is expected to generate 0.92 times more return on investment than Aguas Andinas. However, Grupo Security is 1.09 times less risky than Aguas Andinas. It trades about 0.1 of its potential returns per unit of risk. Aguas Andinas SA is currently generating about 0.08 per unit of risk. If you would invest 14,483 in Grupo Security on September 13, 2024 and sell it today you would earn a total of 11,527 from holding Grupo Security or generate 79.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Grupo Security vs. Aguas Andinas SA
Performance |
| Timeline |
| Grupo Security |
| Aguas Andinas SA |
Grupo Security and Aguas Andinas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Security and Aguas Andinas
The main advantage of trading using opposite Grupo Security and Aguas Andinas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Security position performs unexpectedly, Aguas Andinas 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 Aguas Andinas will offset losses from the drop in Aguas Andinas' long position.| Grupo Security vs. Banco Santander Chile | Grupo Security vs. Banco de Chile | Grupo Security vs. Falabella | Grupo Security vs. Empresas Copec SA |
| Aguas Andinas vs. Parq Arauco | Aguas Andinas vs. Enel Generacin Chile | Aguas Andinas vs. Sociedad Matriz SAAM | Aguas Andinas vs. Empresa Nacional de |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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