Correlation Between Compania and AFP Planvital

Can any of the company-specific risk be diversified away by investing in both Compania and AFP Planvital 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 AFP Planvital 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 AFP Planvital SA, you can compare the effects of market volatilities on Compania and AFP Planvital 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 AFP Planvital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and AFP Planvital.

Diversification Opportunities for Compania and AFP Planvital

0.0

Correlation Coefficient

Compania  AFP Planvital

Pay attention - limited upside

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

Pair Corralation between Compania and AFP Planvital

If you would invest  16,418  in AFP Planvital SA on December 30, 2024 and sell it today you would earn a total of  5,381  from holding AFP Planvital SA or generate 32.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Compania De Inversiones  vs.  AFP Planvital 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 recent stock price mess, may contribute to short-term losses for the institutional investors.

AFP Planvital SA

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in AFP Planvital SA are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating forward indicators, AFP Planvital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compania and AFP Planvital

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

The idea behind Compania De Inversiones and AFP Planvital 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.