Correlation Between Visa and Cencosud
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By analyzing existing cross correlation between Visa Class A and Cencosud, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Cencosud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Cencosud.
Diversification Opportunities for Visa and Cencosud
Poor diversification
The 3 months correlation between Visa and Cencosud is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Cencosud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencosud and Visa 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 Visa Class A 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 Visa i.e., Visa and Cencosud go up and down completely randomly.
Pair Corralation between Visa and Cencosud
Taking into account the 90-day investment horizon Visa is expected to generate 4.1 times less return on investment than Cencosud. But when comparing it to its historical volatility, Visa Class A is 1.11 times less risky than Cencosud. It trades about 0.14 of its potential returns per unit of risk. Cencosud is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 216,500 in Cencosud on October 25, 2024 and sell it today you would earn a total of 23,400 from holding Cencosud or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Visa Class A vs. Cencosud
Performance |
| Timeline |
| Visa Class A |
| Cencosud |
Visa and Cencosud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Cencosud
The main advantage of trading using opposite Visa and Cencosud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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