Correlation Between Southern Copper and Scotiabank Peru
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By analyzing existing cross correlation between Southern Copper Corp and Scotiabank Peru SAA, you can compare the effects of market volatilities on Southern Copper and Scotiabank 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 Southern Copper with a short position of Scotiabank Peru. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Scotiabank Peru.
Diversification Opportunities for Southern Copper and Scotiabank Peru
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Southern and Scotiabank is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper Corp and Scotiabank Peru SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scotiabank Peru SAA and Southern Copper 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 Southern Copper Corp are associated (or correlated) with Scotiabank Peru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scotiabank Peru SAA has no effect on the direction of Southern Copper i.e., Southern Copper and Scotiabank Peru go up and down completely randomly.
Pair Corralation between Southern Copper and Scotiabank Peru
Assuming the 90 days trading horizon Southern Copper Corp is expected to generate 0.28 times more return on investment than Scotiabank Peru. However, Southern Copper Corp is 3.62 times less risky than Scotiabank Peru. It trades about 0.13 of its potential returns per unit of risk. Scotiabank Peru SAA is currently generating about -0.04 per unit of risk. If you would invest 9,410 in Southern Copper Corp on October 25, 2024 and sell it today you would earn a total of 230.00 from holding Southern Copper Corp or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 64.29% |
| Values | Daily Returns |
Southern Copper Corp vs. Scotiabank Peru SAA
Performance |
| Timeline |
| Southern Copper Corp |
| Scotiabank Peru SAA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Southern Copper and Scotiabank Peru Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and Scotiabank Peru
The main advantage of trading using opposite Southern Copper and Scotiabank Peru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper position performs unexpectedly, Scotiabank 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 Scotiabank Peru will offset losses from the drop in Scotiabank Peru's long position.The idea behind Southern Copper Corp and Scotiabank Peru SAA 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.| Scotiabank Peru vs. Bank of America | Scotiabank Peru vs. InRetail Peru Corp | Scotiabank Peru 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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