Correlation Between Cementos Pacasmayo and Captivision Ordinary

Can any of the company-specific risk be diversified away by investing in both Cementos Pacasmayo and Captivision Ordinary 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 Captivision Ordinary 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 Captivision Ordinary Shares, you can compare the effects of market volatilities on Cementos Pacasmayo and Captivision Ordinary 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 Captivision Ordinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cementos Pacasmayo and Captivision Ordinary.

Diversification Opportunities for Cementos Pacasmayo and Captivision Ordinary

-0.89

Correlation Coefficient

Cementos Pacasmayo  Captivision Ordinary

Pay attention - limited upside

The 3 months correlation between Cementos and Captivision is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cementos Pacasmayo SAA and Captivision Ordinary Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Captivision Ordinary 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 Captivision Ordinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Captivision Ordinary has no effect on the direction of Cementos Pacasmayo i.e., Cementos Pacasmayo and Captivision Ordinary go up and down completely randomly.

Pair Corralation between Cementos Pacasmayo and Captivision Ordinary

Given the investment horizon of 90 days Cementos Pacasmayo SAA is expected to generate 0.21 times more return on investment than Captivision Ordinary. However, Cementos Pacasmayo SAA is 4.77 times less risky than Captivision Ordinary. It trades about 0.14 of its potential returns per unit of risk. Captivision Ordinary Shares is currently generating about -0.16 per unit of risk. If you would invest  520.00  in Cementos Pacasmayo SAA on September 13, 2024 and sell it today you would earn a total of  73.00  from holding Cementos Pacasmayo SAA or generate 14.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Cementos Pacasmayo SAA  vs.  Captivision Ordinary Shares

Cementos Pacasmayo SAA

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cementos Pacasmayo SAA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Cementos Pacasmayo exhibited solid returns over the last few months and may actually be approaching a breakup point.

Captivision Ordinary

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Captivision Ordinary Shares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cementos Pacasmayo and Captivision Ordinary

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

The idea behind Cementos Pacasmayo SAA and Captivision Ordinary Shares 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.