Correlation Between Nexa Resources and Southern Copper
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By analyzing existing cross correlation between Nexa Resources Peru and Southern Copper Corp, you can compare the effects of market volatilities on Nexa Resources and Southern Copper 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 Nexa Resources with a short position of Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexa Resources and Southern Copper.
Diversification Opportunities for Nexa Resources and Southern Copper
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nexa and Southern is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nexa Resources Peru and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp and Nexa Resources 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 Nexa Resources Peru are associated (or correlated) with Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of Nexa Resources i.e., Nexa Resources and Southern Copper go up and down completely randomly.
Pair Corralation between Nexa Resources and Southern Copper
Assuming the 90 days trading horizon Nexa Resources Peru is expected to generate 0.65 times more return on investment than Southern Copper. However, Nexa Resources Peru is 1.53 times less risky than Southern Copper. It trades about -0.05 of its potential returns per unit of risk. Southern Copper Corp is currently generating about -0.09 per unit of risk. If you would invest 162.00 in Nexa Resources Peru on October 24, 2024 and sell it today you would lose (7.00) from holding Nexa Resources Peru or give up 4.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 83.78% |
| Values | Daily Returns |
Nexa Resources Peru vs. Southern Copper Corp
Performance |
| Timeline |
| Nexa Resources Peru |
| Southern Copper Corp |
Nexa Resources and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexa Resources and Southern Copper
The main advantage of trading using opposite Nexa Resources and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexa Resources position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Nexa Resources vs. Southern Copper Corp | Nexa Resources vs. Banco de Credito | Nexa Resources vs. InRetail Peru Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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