Correlation Between Marine Products and Cementos Pacasmayo
Can any of the company-specific risk be diversified away by investing in both Marine Products and Cementos Pacasmayo 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 Marine Products and Cementos Pacasmayo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Cementos Pacasmayo SAA, you can compare the effects of market volatilities on Marine Products and Cementos Pacasmayo 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 Marine Products with a short position of Cementos Pacasmayo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Cementos Pacasmayo.
Diversification Opportunities for Marine Products and Cementos Pacasmayo
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Marine and Cementos is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Cementos Pacasmayo SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cementos Pacasmayo SAA and Marine Products 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 Marine Products are associated (or correlated) with Cementos Pacasmayo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cementos Pacasmayo SAA has no effect on the direction of Marine Products i.e., Marine Products and Cementos Pacasmayo go up and down completely randomly.
Pair Corralation between Marine Products and Cementos Pacasmayo
Considering the 90-day investment horizon Marine Products is expected to generate 0.62 times more return on investment than Cementos Pacasmayo. However, Marine Products is 1.62 times less risky than Cementos Pacasmayo. It trades about -0.03 of its potential returns per unit of risk. Cementos Pacasmayo SAA is currently generating about -0.14 per unit of risk. If you would invest 995.00 in Marine Products on September 12, 2024 and sell it today you would lose (11.00) from holding Marine Products or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Products vs. Cementos Pacasmayo SAA
Performance |
| Timeline |
| Marine Products |
| Cementos Pacasmayo SAA |
Marine Products and Cementos Pacasmayo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and Cementos Pacasmayo
The main advantage of trading using opposite Marine Products and Cementos Pacasmayo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, Cementos Pacasmayo 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 Cementos Pacasmayo will offset losses from the drop in Cementos Pacasmayo's long position.| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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