Correlation Between 459506AS0 and Cementos Pacasmayo

Can any of the company-specific risk be diversified away by investing in both 459506AS0 and Cementos Pacasmayo 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 459506AS0 and Cementos Pacasmayo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IFF 3468 01 DEC 50 and Cementos Pacasmayo SAA, you can compare the effects of market volatilities on 459506AS0 and Cementos Pacasmayo 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 459506AS0 with a short position of Cementos Pacasmayo. Check out your portfolio center. Please also check ongoing floating volatility patterns of 459506AS0 and Cementos Pacasmayo.

Diversification Opportunities for 459506AS0 and Cementos Pacasmayo

0.4

Correlation Coefficient

459506AS0  Cementos Pacasmayo

Very weak diversification

The 3 months correlation between 459506AS0 and Cementos is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding IFF 3468 01 DEC 50 and Cementos Pacasmayo SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cementos Pacasmayo SAA and 459506AS0 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 IFF 3468 01 DEC 50 are associated (or correlated) with Cementos Pacasmayo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cementos Pacasmayo SAA has no effect on the direction of 459506AS0 i.e., 459506AS0 and Cementos Pacasmayo go up and down completely randomly.

Pair Corralation between 459506AS0 and Cementos Pacasmayo

Assuming the 90 days trading horizon IFF 3468 01 DEC 50 is expected to under-perform the Cementos Pacasmayo. But the bond apears to be less risky and, when comparing its historical volatility, IFF 3468 01 DEC 50 is 1.98 times less risky than Cementos Pacasmayo. The bond trades about -0.03 of its potential returns per unit of risk. The Cementos Pacasmayo SAA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  591.00  in Cementos Pacasmayo SAA on December 5, 2024 and sell it today you would lose (10.00) from holding Cementos Pacasmayo SAA or give up 1.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.15%
Values	Daily Returns

IFF 3468 01 DEC 50  vs.  Cementos Pacasmayo SAA

IFF 3468 01

Risk-Adjusted Performance

Very Weak

Over the last 90 days IFF 3468 01 DEC 50 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for IFF 3468 01 DEC 50 investors.

Cementos Pacasmayo SAA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cementos Pacasmayo SAA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Cementos Pacasmayo is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with 459506AS0 and Cementos Pacasmayo

The main advantage of trading using opposite 459506AS0 and Cementos Pacasmayo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 459506AS0 position performs unexpectedly, Cementos Pacasmayo 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 Cementos Pacasmayo will offset losses from the drop in Cementos Pacasmayo's long position.

The idea behind IFF 3468 01 DEC 50 and Cementos Pacasmayo 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.