Correlation Between Aldel Financial and Cementos Pacasmayo

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

By analyzing existing cross correlation between Aldel Financial II and Cementos Pacasmayo SAA, you can compare the effects of market volatilities on Aldel Financial and Cementos Pacasmayo 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 Aldel Financial with a short position of Cementos Pacasmayo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldel Financial and Cementos Pacasmayo.

Diversification Opportunities for Aldel Financial and Cementos Pacasmayo

-0.27

Correlation Coefficient

Aldel Financial  Cementos Pacasmayo

Very good diversification

The 3 months correlation between Aldel and Cementos is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aldel Financial II and Cementos Pacasmayo SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cementos Pacasmayo SAA and Aldel Financial 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 Aldel Financial II are associated (or correlated) with Cementos Pacasmayo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cementos Pacasmayo SAA has no effect on the direction of Aldel Financial i.e., Aldel Financial and Cementos Pacasmayo go up and down completely randomly.

Pair Corralation between Aldel Financial and Cementos Pacasmayo

Given the investment horizon of 90 days Aldel Financial II is expected to generate 0.06 times more return on investment than Cementos Pacasmayo. However, Aldel Financial II is 18.1 times less risky than Cementos Pacasmayo. It trades about 0.15 of its potential returns per unit of risk. Cementos Pacasmayo SAA is currently generating about -0.13 per unit of risk. If you would invest  990.00  in Aldel Financial II on October 10, 2024 and sell it today you would earn a total of  3.00  from holding Aldel Financial II or generate 0.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

Aldel Financial II  vs.  Cementos Pacasmayo SAA

Aldel Financial II

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aldel Financial II are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Aldel Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Cementos Pacasmayo SAA

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cementos Pacasmayo SAA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Cementos Pacasmayo may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Aldel Financial and Cementos Pacasmayo

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

The idea behind Aldel Financial II and Cementos Pacasmayo SAA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.