Correlation Between Metalurgica Peruana and Pesquera Exalmar

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

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

Diversification Opportunities for Metalurgica Peruana and Pesquera Exalmar

0.0

Correlation Coefficient

Metalurgica Peruana  Pesquera Exalmar

Pay attention - limited upside

The 3 months correlation between Metalurgica and Pesquera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Peruana SA and Pesquera Exalmar SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pesquera Exalmar SAA and Metalurgica Peruana 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 Metalurgica Peruana SA are associated (or correlated) with Pesquera Exalmar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pesquera Exalmar SAA has no effect on the direction of Metalurgica Peruana i.e., Metalurgica Peruana and Pesquera Exalmar go up and down completely randomly.

Pair Corralation between Metalurgica Peruana and Pesquera Exalmar

If you would invest (100.00) in Metalurgica Peruana SA on October 26, 2024 and sell it today you would earn a total of  100.00  from holding Metalurgica Peruana SA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Metalurgica Peruana SA  vs.  Pesquera Exalmar SAA

Metalurgica Peruana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metalurgica Peruana SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Metalurgica Peruana is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Metalurgica Peruana and Pesquera Exalmar

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

The idea behind Metalurgica Peruana SA and Pesquera Exalmar 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.