Correlation Between Cementos Pacasmayo and Bluerock Homes

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

By analyzing existing cross correlation between Cementos Pacasmayo SAA and Bluerock Homes Trust, you can compare the effects of market volatilities on Cementos Pacasmayo and Bluerock Homes 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 Cementos Pacasmayo with a short position of Bluerock Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cementos Pacasmayo and Bluerock Homes.

Diversification Opportunities for Cementos Pacasmayo and Bluerock Homes

-0.61

Correlation Coefficient

Cementos Pacasmayo  Bluerock Homes

Excellent diversification

The 3 months correlation between Cementos and Bluerock is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cementos Pacasmayo SAA and Bluerock Homes Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Homes Trust and Cementos Pacasmayo 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 Cementos Pacasmayo SAA are associated (or correlated) with Bluerock Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Homes Trust has no effect on the direction of Cementos Pacasmayo i.e., Cementos Pacasmayo and Bluerock Homes go up and down completely randomly.

Pair Corralation between Cementos Pacasmayo and Bluerock Homes

Given the investment horizon of 90 days Cementos Pacasmayo SAA is expected to generate 0.77 times more return on investment than Bluerock Homes. However, Cementos Pacasmayo SAA is 1.3 times less risky than Bluerock Homes. It trades about 0.13 of its potential returns per unit of risk. Bluerock Homes Trust is currently generating about -0.06 per unit of risk. If you would invest  521.00  in Cementos Pacasmayo SAA on September 20, 2024 and sell it today you would earn a total of  70.00  from holding Cementos Pacasmayo SAA or generate 13.44% return on investment over 90 days.

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

Cementos Pacasmayo SAA  vs.  Bluerock Homes Trust

Cementos Pacasmayo SAA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cementos Pacasmayo SAA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Cementos Pacasmayo exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bluerock Homes Trust

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Bluerock Homes Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Cementos Pacasmayo and Bluerock Homes

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

The idea behind Cementos Pacasmayo SAA and Bluerock Homes Trust 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.