Correlation Between Intelligent Group and Cementos Pacasmayo

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

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

Diversification Opportunities for Intelligent Group and Cementos Pacasmayo

-0.38

Correlation Coefficient

Intelligent Group  Cementos Pacasmayo

Very good diversification

The 3 months correlation between Intelligent and Cementos is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intelligent Group Limited and Cementos Pacasmayo SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cementos Pacasmayo SAA and Intelligent Group 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 Intelligent Group Limited are associated (or correlated) with Cementos Pacasmayo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cementos Pacasmayo SAA has no effect on the direction of Intelligent Group i.e., Intelligent Group and Cementos Pacasmayo go up and down completely randomly.

Pair Corralation between Intelligent Group and Cementos Pacasmayo

Given the investment horizon of 90 days Intelligent Group Limited is expected to under-perform the Cementos Pacasmayo. In addition to that, Intelligent Group is 3.75 times more volatile than Cementos Pacasmayo SAA. It trades about -0.06 of its total potential returns per unit of risk. Cementos Pacasmayo SAA is currently generating about 0.08 per unit of volatility. If you would invest  537.00  in Cementos Pacasmayo SAA on December 22, 2024 and sell it today you would earn a total of  40.00  from holding Cementos Pacasmayo SAA or generate 7.45% return on investment over 90 days.

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

Intelligent Group Limited  vs.  Cementos Pacasmayo SAA

Intelligent Group

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in April 2025. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Cementos Pacasmayo SAA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cementos Pacasmayo SAA are ranked lower than 5 (%) 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 April 2025.

Pair Trading with Intelligent Group and Cementos Pacasmayo

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

The idea behind Intelligent Group Limited and Cementos Pacasmayo SAA 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.