Correlation Between Cementos Pacasmayo and Lonking Holdings
Can any of the company-specific risk be diversified away by investing in both Cementos Pacasmayo and Lonking Holdings 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 Cementos Pacasmayo and Lonking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cementos Pacasmayo SAA and Lonking Holdings Ltd, you can compare the effects of market volatilities on Cementos Pacasmayo and Lonking Holdings 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 Cementos Pacasmayo with a short position of Lonking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cementos Pacasmayo and Lonking Holdings.
Diversification Opportunities for Cementos Pacasmayo and Lonking Holdings
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cementos and Lonking is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cementos Pacasmayo SAA and Lonking Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lonking Holdings and Cementos Pacasmayo 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 Cementos Pacasmayo SAA are associated (or correlated) with Lonking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lonking Holdings has no effect on the direction of Cementos Pacasmayo i.e., Cementos Pacasmayo and Lonking Holdings go up and down completely randomly.
Pair Corralation between Cementos Pacasmayo and Lonking Holdings
Given the investment horizon of 90 days Cementos Pacasmayo SAA is expected to generate 1.19 times more return on investment than Lonking Holdings. However, Cementos Pacasmayo is 1.19 times more volatile than Lonking Holdings Ltd. It trades about 0.05 of its potential returns per unit of risk. Lonking Holdings Ltd is currently generating about -0.11 per unit of risk. If you would invest 570.00 in Cementos Pacasmayo SAA on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Cementos Pacasmayo SAA or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Cementos Pacasmayo SAA vs. Lonking Holdings Ltd
Performance |
| Timeline |
| Cementos Pacasmayo SAA |
| Lonking Holdings |
Cementos Pacasmayo and Lonking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cementos Pacasmayo and Lonking Holdings
The main advantage of trading using opposite Cementos Pacasmayo and Lonking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cementos Pacasmayo position performs unexpectedly, Lonking Holdings 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 Lonking Holdings will offset losses from the drop in Lonking Holdings' long position.| Cementos Pacasmayo vs. Summit Materials | Cementos Pacasmayo vs. Eagle Materials | Cementos Pacasmayo vs. United States Lime | Cementos Pacasmayo vs. James Hardie Industries |
| Lonking Holdings vs. Vera Bradley | Lonking Holdings vs. Apogee Therapeutics, Common | Lonking Holdings vs. European Wax Center | Lonking Holdings vs. RBC Bearings Incorporated |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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