Correlation Between Grupo Simec and Cementos Pacasmayo
Can any of the company-specific risk be diversified away by investing in both Grupo Simec 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 Grupo Simec and Cementos Pacasmayo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Simec SAB and Cementos Pacasmayo SAA, you can compare the effects of market volatilities on Grupo Simec 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 Grupo Simec with a short position of Cementos Pacasmayo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Cementos Pacasmayo.
Diversification Opportunities for Grupo Simec and Cementos Pacasmayo
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grupo and Cementos is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB 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 Grupo Simec 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 Grupo Simec SAB 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 Grupo Simec i.e., Grupo Simec and Cementos Pacasmayo go up and down completely randomly.
Pair Corralation between Grupo Simec and Cementos Pacasmayo
Considering the 90-day investment horizon Grupo Simec SAB is expected to under-perform the Cementos Pacasmayo. In addition to that, Grupo Simec is 1.52 times more volatile than Cementos Pacasmayo SAA. It trades about -0.01 of its total potential returns per unit of risk. Cementos Pacasmayo SAA is currently generating about 0.06 per unit of volatility. If you would invest 457.00 in Cementos Pacasmayo SAA on November 9, 2024 and sell it today you would earn a total of 123.00 from holding Cementos Pacasmayo SAA or generate 26.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.65% |
| Values | Daily Returns |
Grupo Simec SAB vs. Cementos Pacasmayo SAA
Performance |
| Timeline |
| Grupo Simec SAB |
| Cementos Pacasmayo SAA |
Grupo Simec and Cementos Pacasmayo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Cementos Pacasmayo
The main advantage of trading using opposite Grupo Simec and Cementos Pacasmayo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec 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.| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
| Cementos Pacasmayo vs. Summit Materials | Cementos Pacasmayo vs. Eagle Materials | Cementos Pacasmayo vs. United States Lime | Cementos Pacasmayo vs. James Hardie Industries |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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