Correlation Between Invertec Foods and Aguas Andinas

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

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

Diversification Opportunities for Invertec Foods and Aguas Andinas

0.0

Correlation Coefficient

Invertec Foods  Aguas Andinas

Pay attention - limited upside

The 3 months correlation between Invertec and Aguas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invertec Foods SA 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 Invertec Foods 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 Invertec Foods SA 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 Invertec Foods i.e., Invertec Foods and Aguas Andinas go up and down completely randomly.

Pair Corralation between Invertec Foods and Aguas Andinas

If you would invest  31,350  in Aguas Andinas SA on December 2, 2024 and sell it today you would earn a total of  250.00  from holding Aguas Andinas SA or generate 0.8% return on investment over 90 days.

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

Invertec Foods SA  vs.  Aguas Andinas SA

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 current stock price disarray, may contribute to short-term losses for the investors.

Aguas Andinas SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aguas Andinas SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Aguas Andinas may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Invertec Foods and Aguas Andinas

The main advantage of trading using opposite Invertec Foods and Aguas Andinas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invertec Foods 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.

The idea behind Invertec Foods SA and Aguas Andinas 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.