Correlation Between Southern Copper and Datagroup

Can any of the company-specific risk be diversified away by investing in both Southern Copper and Datagroup 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 Southern Copper and Datagroup into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Southern Copper Corp and Datagroup SE, you can compare the effects of market volatilities on Southern Copper and Datagroup 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 Datagroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Datagroup.

Diversification Opportunities for Southern Copper and Datagroup

-0.48

Correlation Coefficient

Southern Copper  Datagroup

Very good diversification

The 3 months correlation between Southern and Datagroup is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper Corp and Datagroup SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datagroup SE 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 Datagroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datagroup SE has no effect on the direction of Southern Copper i.e., Southern Copper and Datagroup go up and down completely randomly.

Pair Corralation between Southern Copper and Datagroup

Assuming the 90 days trading horizon Southern Copper Corp is expected to under-perform the Datagroup. In addition to that, Southern Copper is 1.12 times more volatile than Datagroup SE. It trades about -0.13 of its total potential returns per unit of risk. Datagroup SE is currently generating about 0.11 per unit of volatility. If you would invest  4,505  in Datagroup SE on September 29, 2024 and sell it today you would earn a total of  175.00  from holding Datagroup SE or generate 3.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Southern Copper Corp  vs.  Datagroup SE

Southern Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southern Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Datagroup SE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Datagroup SE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Datagroup may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Southern Copper and Datagroup

The main advantage of trading using opposite Southern Copper and Datagroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper position performs unexpectedly, Datagroup 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 Datagroup will offset losses from the drop in Datagroup's long position.

The idea behind Southern Copper Corp and Datagroup SE 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.