Correlation Between Sociedad Matriz and Compania General
Can any of the company-specific risk be diversified away by investing in both Sociedad Matriz and Compania General 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 Sociedad Matriz and Compania General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sociedad Matriz SAAM and Compania General de, you can compare the effects of market volatilities on Sociedad Matriz and Compania General 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 Matriz with a short position of Compania General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sociedad Matriz and Compania General.
Diversification Opportunities for Sociedad Matriz and Compania General
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sociedad and Compania is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sociedad Matriz SAAM and Compania General de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania General and Sociedad Matriz 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 Matriz SAAM are associated (or correlated) with Compania General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania General has no effect on the direction of Sociedad Matriz i.e., Sociedad Matriz and Compania General go up and down completely randomly.
Pair Corralation between Sociedad Matriz and Compania General
Assuming the 90 days trading horizon Sociedad Matriz SAAM is expected to generate 0.47 times more return on investment than Compania General. However, Sociedad Matriz SAAM is 2.11 times less risky than Compania General. It trades about 0.04 of its potential returns per unit of risk. Compania General de is currently generating about -0.02 per unit of risk. If you would invest 8,268 in Sociedad Matriz SAAM on August 24, 2024 and sell it today you would earn a total of 1,942 from holding Sociedad Matriz SAAM or generate 23.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.05% |
| Values | Daily Returns |
Sociedad Matriz SAAM vs. Compania General de
Performance |
| Timeline |
| Sociedad Matriz SAAM |
| Compania General |
Sociedad Matriz and Compania General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sociedad Matriz and Compania General
The main advantage of trading using opposite Sociedad Matriz and Compania General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sociedad Matriz position performs unexpectedly, Compania General 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 Compania General will offset losses from the drop in Compania General's long position.| Sociedad Matriz vs. Vapores | Sociedad Matriz vs. Enel Amricas SA | Sociedad Matriz vs. Empresas CMPC | Sociedad Matriz vs. Colbun |
| Compania General vs. Compania Cervecerias Unidas | Compania General vs. Aguas Andinas SA | Compania General vs. Parq Arauco | Compania General vs. Enel Generacin 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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