Correlation Between Cementos Pacasmayo and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Cementos Pacasmayo and Sealed Air 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 Sealed Air 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 Sealed Air, you can compare the effects of market volatilities on Cementos Pacasmayo and Sealed Air 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cementos Pacasmayo and Sealed Air.
Diversification Opportunities for Cementos Pacasmayo and Sealed Air
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cementos and Sealed is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cementos Pacasmayo SAA and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air has no effect on the direction of Cementos Pacasmayo i.e., Cementos Pacasmayo and Sealed Air go up and down completely randomly.
Pair Corralation between Cementos Pacasmayo and Sealed Air
Given the investment horizon of 90 days Cementos Pacasmayo SAA is expected to generate 1.0 times more return on investment than Sealed Air. However, Cementos Pacasmayo is 1.0 times more volatile than Sealed Air. It trades about 0.05 of its potential returns per unit of risk. Sealed Air is currently generating about 0.03 per unit of risk. If you would invest 485.00 in Cementos Pacasmayo SAA on September 2, 2024 and sell it today you would earn a total of 90.00 from holding Cementos Pacasmayo SAA or generate 18.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cementos Pacasmayo SAA vs. Sealed Air
Performance |
| Timeline |
| Cementos Pacasmayo SAA |
| Sealed Air |
Cementos Pacasmayo and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cementos Pacasmayo and Sealed Air
The main advantage of trading using opposite Cementos Pacasmayo and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cementos Pacasmayo position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| Cementos Pacasmayo vs. Summit Materials | Cementos Pacasmayo vs. Eagle Materials | Cementos Pacasmayo vs. United States Lime | Cementos Pacasmayo vs. James Hardie Industries |
| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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