Correlation Between Rimac Seguros and Metalurgica Peruana

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

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

Diversification Opportunities for Rimac Seguros and Metalurgica Peruana

0.0

Correlation Coefficient

Rimac Seguros  Metalurgica Peruana

Pay attention - limited upside

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

Pair Corralation between Rimac Seguros and Metalurgica Peruana

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

Rimac Seguros y  vs.  Metalurgica Peruana SA

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Rimac Seguros and Metalurgica Peruana

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

The idea behind Rimac Seguros y and Metalurgica Peruana SA 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.