Correlation Between Metalurgica Peruana and Rimac Seguros

Can any of the company-specific risk be diversified away by investing in both Metalurgica Peruana and Rimac Seguros 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 Rimac Seguros 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 Rimac Seguros y, you can compare the effects of market volatilities on Metalurgica Peruana and Rimac Seguros 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 Rimac Seguros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Peruana and Rimac Seguros.

Diversification Opportunities for Metalurgica Peruana and Rimac Seguros

0.0

Correlation Coefficient

Metalurgica Peruana  Rimac Seguros

Pay attention - limited upside

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

Pair Corralation between Metalurgica Peruana and Rimac Seguros

If you would invest  95.00  in Rimac Seguros y on December 26, 2024 and sell it today you would earn a total of  0.00  from holding Rimac Seguros y or generate 0.0% 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.  Rimac Seguros y

Metalurgica Peruana

Risk-Adjusted Performance

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 current stock price disturbance, may contribute to short-term losses for the investors.

Rimac Seguros y

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rimac Seguros y has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Rimac Seguros is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Metalurgica Peruana and Rimac Seguros

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

The idea behind Metalurgica Peruana SA and Rimac Seguros y 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.