Correlation Between Cementos Pacasmayo and Intelligent Group

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

Diversification Opportunities for Cementos Pacasmayo and Intelligent Group

-0.32

Correlation Coefficient

Cementos Pacasmayo  Intelligent Group

Very good diversification

The 3 months correlation between Cementos and Intelligent is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cementos Pacasmayo SAA and Intelligent Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Group 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 Intelligent Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Group has no effect on the direction of Cementos Pacasmayo i.e., Cementos Pacasmayo and Intelligent Group go up and down completely randomly.

Pair Corralation between Cementos Pacasmayo and Intelligent Group

Given the investment horizon of 90 days Cementos Pacasmayo SAA is expected to generate 0.36 times more return on investment than Intelligent Group. However, Cementos Pacasmayo SAA is 2.8 times less risky than Intelligent Group. It trades about 0.05 of its potential returns per unit of risk. Intelligent Group Limited is currently generating about -0.03 per unit of risk. If you would invest  548.00  in Cementos Pacasmayo SAA on October 25, 2024 and sell it today you would earn a total of  29.00  from holding Cementos Pacasmayo SAA or generate 5.29% return on investment over 90 days.

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

Cementos Pacasmayo SAA  vs.  Intelligent Group Limited

Cementos Pacasmayo SAA

Risk-Adjusted Performance

4 of 100

Insignificant

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.

Intelligent Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelligent Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Pair Trading with Cementos Pacasmayo and Intelligent Group

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

The idea behind Cementos Pacasmayo SAA and Intelligent Group Limited 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .