Correlation Between Nexa Resources and Metalurgica Peruana
Can any of the company-specific risk be diversified away by investing in both Nexa Resources 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 Nexa Resources and Metalurgica Peruana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexa Resources Atacocha and Metalurgica Peruana SA, you can compare the effects of market volatilities on Nexa Resources 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 Nexa Resources with a short position of Metalurgica Peruana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexa Resources and Metalurgica Peruana.
Diversification Opportunities for Nexa Resources and Metalurgica Peruana
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nexa and Metalurgica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nexa Resources Atacocha and Metalurgica Peruana SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Peruana and Nexa Resources 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 Nexa Resources Atacocha 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 Nexa Resources i.e., Nexa Resources and Metalurgica Peruana go up and down completely randomly.
Pair Corralation between Nexa Resources and Metalurgica Peruana
If you would invest (100.00) in Metalurgica Peruana SA on September 3, 2024 and sell it today you would earn a total of 100.00 from holding Metalurgica Peruana SA or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexa Resources Atacocha vs. Metalurgica Peruana SA
Performance |
| Timeline |
| Nexa Resources Atacocha |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Metalurgica Peruana |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nexa Resources and Metalurgica Peruana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexa Resources and Metalurgica Peruana
The main advantage of trading using opposite Nexa Resources and Metalurgica Peruana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexa Resources 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 Nexa Resources Atacocha 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.| Metalurgica Peruana vs. Southern Copper Corp | Metalurgica Peruana vs. Banco de Credito | Metalurgica Peruana vs. InRetail Peru Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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