Correlation Between Compania Minera and InRetail Peru
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By analyzing existing cross correlation between Compania Minera Poderosa and InRetail Peru Corp, you can compare the effects of market volatilities on Compania Minera and InRetail Peru 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 InRetail Peru. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Minera and InRetail Peru.
Diversification Opportunities for Compania Minera and InRetail Peru
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Compania and InRetail is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Compania Minera Poderosa and InRetail Peru Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InRetail Peru Corp 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 InRetail Peru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InRetail Peru Corp has no effect on the direction of Compania Minera i.e., Compania Minera and InRetail Peru go up and down completely randomly.
Pair Corralation between Compania Minera and InRetail Peru
Assuming the 90 days trading horizon Compania Minera Poderosa is expected to generate 2.17 times more return on investment than InRetail Peru. However, Compania Minera is 2.17 times more volatile than InRetail Peru Corp. It trades about 0.04 of its potential returns per unit of risk. InRetail Peru Corp is currently generating about -0.04 per unit of risk. If you would invest 740.00 in Compania Minera Poderosa on September 12, 2024 and sell it today you would earn a total of 85.00 from holding Compania Minera Poderosa or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.37% |
| Values | Daily Returns |
Compania Minera Poderosa vs. InRetail Peru Corp
Performance |
| Timeline |
| Compania Minera Poderosa |
| InRetail Peru Corp |
Compania Minera and InRetail Peru Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Minera and InRetail Peru
The main advantage of trading using opposite Compania Minera and InRetail Peru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Minera position performs unexpectedly, InRetail Peru 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 InRetail Peru will offset losses from the drop in InRetail Peru's long position.The idea behind Compania Minera Poderosa and InRetail Peru Corp 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.| InRetail Peru vs. Nexa Resources Peru | InRetail Peru vs. Citigroup | InRetail Peru vs. Compania de Minas | InRetail Peru vs. Compania Minera Poderosa |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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