Correlation Between Compania Minera and Sociedad Minera
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By analyzing existing cross correlation between Compania Minera Poderosa and Sociedad Minera Cerro, you can compare the effects of market volatilities on Compania Minera and Sociedad Minera 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 Compania Minera with a short position of Sociedad Minera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Minera and Sociedad Minera.
Diversification Opportunities for Compania Minera and Sociedad Minera
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compania and Sociedad is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Compania Minera Poderosa and Sociedad Minera Cerro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sociedad Minera Cerro and Compania 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 Compania Minera Poderosa are associated (or correlated) with Sociedad Minera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sociedad Minera Cerro has no effect on the direction of Compania Minera i.e., Compania Minera and Sociedad Minera go up and down completely randomly.
Pair Corralation between Compania Minera and Sociedad Minera
Assuming the 90 days trading horizon Compania Minera Poderosa is expected to generate 1.75 times more return on investment than Sociedad Minera. However, Compania Minera is 1.75 times more volatile than Sociedad Minera Cerro. It trades about 0.05 of its potential returns per unit of risk. Sociedad Minera Cerro is currently generating about -0.2 per unit of risk. If you would invest 840.00 in Compania Minera Poderosa on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Compania Minera Poderosa or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Compania Minera Poderosa vs. Sociedad Minera Cerro
Performance |
| Timeline |
| Compania Minera Poderosa |
| Sociedad Minera Cerro |
Compania Minera and Sociedad Minera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Minera and Sociedad Minera
The main advantage of trading using opposite Compania Minera and Sociedad Minera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Minera position performs unexpectedly, Sociedad Minera 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 Sociedad Minera will offset losses from the drop in Sociedad Minera's long position.| Compania Minera vs. Corporacion Aceros Arequipa | Compania Minera vs. Bank of America | Compania Minera vs. Intel | Compania Minera vs. Citigroup |
| Sociedad Minera vs. Compania Minera Poderosa | Sociedad Minera vs. Corporacion Aceros Arequipa | Sociedad Minera vs. Bank of America | Sociedad Minera vs. Intel |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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