Correlation Between Baroyeca Gold and Peruvian Metals

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

By analyzing existing cross correlation between Baroyeca Gold Silver and Peruvian Metals Corp, you can compare the effects of market volatilities on Baroyeca Gold and Peruvian Metals 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 Baroyeca Gold with a short position of Peruvian Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baroyeca Gold and Peruvian Metals.

Diversification Opportunities for Baroyeca Gold and Peruvian Metals

0.0

Correlation Coefficient

Baroyeca Gold  Peruvian Metals

Pay attention - limited upside

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

Pair Corralation between Baroyeca Gold and Peruvian Metals

If you would invest  1.43  in Peruvian Metals Corp on December 23, 2024 and sell it today you would earn a total of  0.04  from holding Peruvian Metals Corp or generate 2.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Baroyeca Gold Silver  vs.  Peruvian Metals Corp

Baroyeca Gold Silver

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baroyeca Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Baroyeca Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Peruvian Metals Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peruvian Metals Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Peruvian Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Baroyeca Gold and Peruvian Metals

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

The idea behind Baroyeca Gold Silver and Peruvian Metals Corp 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.