Correlation Between Pesquera Exalmar and Sociedad Minera

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

By analyzing existing cross correlation between Pesquera Exalmar SAA and Sociedad Minera el, you can compare the effects of market volatilities on Pesquera Exalmar and Sociedad Minera 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 Pesquera Exalmar with a short position of Sociedad Minera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pesquera Exalmar and Sociedad Minera.

Diversification Opportunities for Pesquera Exalmar and Sociedad Minera

-0.5

Correlation Coefficient

Pesquera Exalmar  Sociedad Minera

Very good diversification

The 3 months correlation between Pesquera and Sociedad is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pesquera Exalmar SAA and Sociedad Minera el in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Minera el and Pesquera Exalmar 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 Pesquera Exalmar SAA are associated (or correlated) with Sociedad Minera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Minera el has no effect on the direction of Pesquera Exalmar i.e., Pesquera Exalmar and Sociedad Minera go up and down completely randomly.

Pair Corralation between Pesquera Exalmar and Sociedad Minera

Assuming the 90 days trading horizon Pesquera Exalmar SAA is expected to under-perform the Sociedad Minera. In addition to that, Pesquera Exalmar is 1.87 times more volatile than Sociedad Minera el. It trades about -0.13 of its total potential returns per unit of risk. Sociedad Minera el is currently generating about -0.19 per unit of volatility. If you would invest  1,050  in Sociedad Minera el on October 26, 2024 and sell it today you would lose (50.00) from holding Sociedad Minera el or give up 4.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	60.0%
Values	Daily Returns

Pesquera Exalmar SAA  vs.  Sociedad Minera el

Pesquera Exalmar SAA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pesquera Exalmar SAA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sociedad Minera el

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sociedad Minera el has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Pesquera Exalmar and Sociedad Minera

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

The idea behind Pesquera Exalmar SAA and Sociedad Minera el 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.