Correlation Between Southern Copper and Vitro SAB

Can any of the company-specific risk be diversified away by investing in both Southern Copper and Vitro SAB 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 Southern Copper and Vitro SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Southern Copper and Vitro SAB de, you can compare the effects of market volatilities on Southern Copper and Vitro SAB 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 Southern Copper with a short position of Vitro SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Vitro SAB.

Diversification Opportunities for Southern Copper and Vitro SAB

0.0

Correlation Coefficient

Southern Copper  Vitro SAB

Pay attention - limited upside

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

Pair Corralation between Southern Copper and Vitro SAB

If you would invest (100.00) in Vitro SAB de on December 22, 2024 and sell it today you would earn a total of  100.00  from holding Vitro SAB de 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

Southern Copper  vs.  Vitro SAB de

Southern Copper

Risk-Adjusted Performance

Very Weak

Over the last 90 days Southern Copper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Vitro SAB de

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Southern Copper and Vitro SAB

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

The idea behind Southern Copper and Vitro SAB de 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.