Correlation Between Rimac Seguros and Southern Copper

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

Diversification Opportunities for Rimac Seguros and Southern Copper

-0.07

Correlation Coefficient

Rimac Seguros  Southern Copper

Good diversification

The 3 months correlation between Rimac and Southern is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Rimac Seguros y and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of Rimac Seguros i.e., Rimac Seguros and Southern Copper go up and down completely randomly.

Pair Corralation between Rimac Seguros and Southern Copper

Assuming the 90 days trading horizon Rimac Seguros y is expected to generate 0.87 times more return on investment than Southern Copper. However, Rimac Seguros y is 1.15 times less risky than Southern Copper. It trades about 0.12 of its potential returns per unit of risk. Southern Copper Corp is currently generating about -0.19 per unit of risk. If you would invest  92.00  in Rimac Seguros y on October 26, 2024 and sell it today you would earn a total of  4.00  from holding Rimac Seguros y or generate 4.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	48.15%
Values	Daily Returns

Rimac Seguros y  vs.  Southern Copper Corp

Rimac Seguros y

Risk-Adjusted Performance

0 of 100

OK

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 weak technical and fundamental indicators, Rimac Seguros may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Southern Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southern Copper Corp 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 forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Rimac Seguros and Southern Copper

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

The idea behind Rimac Seguros y and Southern Copper Corp 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.