Correlation Between Sociedad Minera and Corporacion Aceros
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By analyzing existing cross correlation between Sociedad Minera Cerro and Corporacion Aceros Arequipa, you can compare the effects of market volatilities on Sociedad Minera and Corporacion Aceros 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 Sociedad Minera with a short position of Corporacion Aceros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sociedad Minera and Corporacion Aceros.
Diversification Opportunities for Sociedad Minera and Corporacion Aceros
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sociedad and Corporacion is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sociedad Minera Cerro and Corporacion Aceros Arequipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion Aceros and Sociedad Minera 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 Sociedad Minera Cerro are associated (or correlated) with Corporacion Aceros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion Aceros has no effect on the direction of Sociedad Minera i.e., Sociedad Minera and Corporacion Aceros go up and down completely randomly.
Pair Corralation between Sociedad Minera and Corporacion Aceros
Assuming the 90 days trading horizon Sociedad Minera Cerro is expected to generate 0.7 times more return on investment than Corporacion Aceros. However, Sociedad Minera Cerro is 1.44 times less risky than Corporacion Aceros. It trades about 0.14 of its potential returns per unit of risk. Corporacion Aceros Arequipa is currently generating about 0.01 per unit of risk. If you would invest 3,950 in Sociedad Minera Cerro on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Sociedad Minera Cerro or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sociedad Minera Cerro vs. Corporacion Aceros Arequipa
Performance |
| Timeline |
| Sociedad Minera Cerro |
| Corporacion Aceros |
Sociedad Minera and Corporacion Aceros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sociedad Minera and Corporacion Aceros
The main advantage of trading using opposite Sociedad Minera and Corporacion Aceros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sociedad Minera position performs unexpectedly, Corporacion Aceros 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 Corporacion Aceros will offset losses from the drop in Corporacion Aceros' long position.| Sociedad Minera vs. Banco de Credito | Sociedad Minera vs. Bank of America | Sociedad Minera vs. Southern Copper Corp | Sociedad Minera vs. InRetail Peru Corp |
| Corporacion Aceros vs. Bank of America | Corporacion Aceros vs. InRetail Peru Corp | Corporacion Aceros vs. Banco de Credito |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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