Correlation Between Cementos Pacasmayo and Trio Tech

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

Diversification Opportunities for Cementos Pacasmayo and Trio Tech

0.02

Correlation Coefficient

Cementos Pacasmayo  Trio Tech

Significant diversification

The 3 months correlation between Cementos and Trio is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cementos Pacasmayo SAA and Trio Tech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Tech International 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 Trio Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Tech International has no effect on the direction of Cementos Pacasmayo i.e., Cementos Pacasmayo and Trio Tech go up and down completely randomly.

Pair Corralation between Cementos Pacasmayo and Trio Tech

Given the investment horizon of 90 days Cementos Pacasmayo is expected to generate 1.27 times less return on investment than Trio Tech. But when comparing it to its historical volatility, Cementos Pacasmayo SAA is 2.05 times less risky than Trio Tech. It trades about 0.04 of its potential returns per unit of risk. Trio Tech International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  515.00  in Trio Tech International on October 23, 2024 and sell it today you would earn a total of  66.00  from holding Trio Tech International or generate 12.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Cementos Pacasmayo SAA  vs.  Trio Tech International

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.

Trio Tech International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trio Tech International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Cementos Pacasmayo and Trio Tech

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

The idea behind Cementos Pacasmayo SAA and Trio Tech International 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.