Correlation Between Cementos Pacasmayo and Beneficient

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

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

Diversification Opportunities for Cementos Pacasmayo and Beneficient

-0.35

Correlation Coefficient

Cementos Pacasmayo  Beneficient

Very good diversification

The 3 months correlation between Cementos and Beneficient is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cementos Pacasmayo SAA and Beneficient Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beneficient Class and Cementos Pacasmayo 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 Cementos Pacasmayo SAA are associated (or correlated) with Beneficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beneficient Class has no effect on the direction of Cementos Pacasmayo i.e., Cementos Pacasmayo and Beneficient go up and down completely randomly.

Pair Corralation between Cementos Pacasmayo and Beneficient

Given the investment horizon of 90 days Cementos Pacasmayo SAA is expected to under-perform the Beneficient. But the stock apears to be less risky and, when comparing its historical volatility, Cementos Pacasmayo SAA is 3.07 times less risky than Beneficient. The stock trades about -0.13 of its potential returns per unit of risk. The Beneficient Class A is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  82.00  in Beneficient Class A on October 10, 2024 and sell it today you would lose (7.00) from holding Beneficient Class A or give up 8.54% of portfolio value over 90 days.

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

Cementos Pacasmayo SAA  vs.  Beneficient Class A

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.

Beneficient Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Beneficient Class A 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 nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cementos Pacasmayo and Beneficient

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

The idea behind Cementos Pacasmayo SAA and Beneficient Class A 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.