Correlation Between Compania and Invertec Foods

Can any of the company-specific risk be diversified away by investing in both Compania and Invertec Foods 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 Compania and Invertec Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Compania De Inversiones and Invertec Foods SA, you can compare the effects of market volatilities on Compania and Invertec Foods 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 Compania with a short position of Invertec Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Invertec Foods.

Diversification Opportunities for Compania and Invertec Foods

0.0

Correlation Coefficient

Compania  Invertec Foods

Pay attention - limited upside

The 3 months correlation between Compania and Invertec is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compania De Inversiones and Invertec Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invertec Foods SA and Compania 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 Compania De Inversiones are associated (or correlated) with Invertec Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invertec Foods SA has no effect on the direction of Compania i.e., Compania and Invertec Foods go up and down completely randomly.

Pair Corralation between Compania and Invertec Foods

If you would invest (100.00) in Invertec Foods SA on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Invertec Foods SA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Compania De Inversiones  vs.  Invertec Foods SA

Compania De Inversiones

Risk-Adjusted Performance

Very Weak

Over the last 90 days Compania De Inversiones has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Compania is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Invertec Foods SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invertec Foods SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Invertec Foods is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Compania and Invertec Foods

The main advantage of trading using opposite Compania and Invertec Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania position performs unexpectedly, Invertec Foods 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 Invertec Foods will offset losses from the drop in Invertec Foods' long position.

The idea behind Compania De Inversiones and Invertec Foods SA 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.

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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.