Correlation Between Masisa and Vina Concha

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

By analyzing existing cross correlation between Masisa and Vina Concha To, you can compare the effects of market volatilities on Masisa and Vina Concha 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 Masisa with a short position of Vina Concha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Masisa and Vina Concha.

Diversification Opportunities for Masisa and Vina Concha

0.5

Correlation Coefficient

Masisa  Vina Concha

Very weak diversification

The 3 months correlation between Masisa and Vina is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Masisa and Vina Concha To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vina Concha To and Masisa 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 Masisa are associated (or correlated) with Vina Concha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vina Concha To has no effect on the direction of Masisa i.e., Masisa and Vina Concha go up and down completely randomly.

Pair Corralation between Masisa and Vina Concha

Assuming the 90 days trading horizon Masisa is expected to under-perform the Vina Concha. In addition to that, Masisa is 1.01 times more volatile than Vina Concha To. It trades about -0.26 of its total potential returns per unit of risk. Vina Concha To is currently generating about -0.09 per unit of volatility. If you would invest  113,240  in Vina Concha To on September 3, 2024 and sell it today you would lose (5,340) from holding Vina Concha To or give up 4.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Masisa  vs.  Vina Concha To

Masisa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Masisa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Vina Concha To

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vina Concha To has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vina Concha is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Masisa and Vina Concha

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

The idea behind Masisa and Vina Concha To 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.