Correlation Between Cementos Pacasmayo and Pesquera Exalmar

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Can any of the company-specific risk be diversified away by investing in both Cementos Pacasmayo and Pesquera Exalmar 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 Pesquera Exalmar 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 Pesquera Exalmar SAA, you can compare the effects of market volatilities on Cementos Pacasmayo and Pesquera Exalmar 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 Pesquera Exalmar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cementos Pacasmayo and Pesquera Exalmar.

Diversification Opportunities for Cementos Pacasmayo and Pesquera Exalmar

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Cementos Pacasmayo and Pesquera Exalmar

If you would invest  186.00  in Pesquera Exalmar SAA on August 31, 2024 and sell it today you would earn a total of  64.00  from holding Pesquera Exalmar SAA or generate 34.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Cementos Pacasmayo SAA  vs.  Pesquera Exalmar SAA

 Performance 
       Timeline  
Cementos Pacasmayo SAA 

Risk-Adjusted Performance

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Over the last 90 days Cementos Pacasmayo SAA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Cementos Pacasmayo is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
Pesquera Exalmar SAA 

Risk-Adjusted Performance

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Strong
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Over the last 90 days Pesquera Exalmar SAA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat inconsistent primary indicators, Pesquera Exalmar sustained solid returns over the last few months and may actually be approaching a breakup point.

Cementos Pacasmayo and Pesquera Exalmar Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cementos Pacasmayo and Pesquera Exalmar

The main advantage of trading using opposite Cementos Pacasmayo and Pesquera Exalmar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cementos Pacasmayo position performs unexpectedly, Pesquera Exalmar 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 Pesquera Exalmar will offset losses from the drop in Pesquera Exalmar's long position.
The idea behind Cementos Pacasmayo SAA and Pesquera Exalmar 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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