Correlation Between Credicorp and Impulsora Del

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

By analyzing existing cross correlation between Credicorp and Impulsora del Desarrollo, you can compare the effects of market volatilities on Credicorp and Impulsora Del 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 Credicorp with a short position of Impulsora Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credicorp and Impulsora Del.

Diversification Opportunities for Credicorp and Impulsora Del

0.26

Correlation Coefficient

Credicorp  Impulsora Del

Modest diversification

The 3 months correlation between Credicorp and Impulsora is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Credicorp and Impulsora del Desarrollo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impulsora del Desarrollo and Credicorp 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 Credicorp are associated (or correlated) with Impulsora Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impulsora del Desarrollo has no effect on the direction of Credicorp i.e., Credicorp and Impulsora Del go up and down completely randomly.

Pair Corralation between Credicorp and Impulsora Del

If you would invest  327,484  in Credicorp on September 26, 2024 and sell it today you would earn a total of  36,516  from holding Credicorp or generate 11.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Credicorp  vs.  Impulsora del Desarrollo

Credicorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Credicorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Credicorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Impulsora del Desarrollo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impulsora del Desarrollo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Impulsora Del is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Credicorp and Impulsora Del

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

The idea behind Credicorp and Impulsora del Desarrollo 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.