Correlation Between Compania and Compania Minera

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

By analyzing existing cross correlation between Compania de Minas and Compania Minera Atacocha, you can compare the effects of market volatilities on Compania and Compania Minera 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 Compania with a short position of Compania Minera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Compania Minera.

Diversification Opportunities for Compania and Compania Minera

0.91

Correlation Coefficient

Compania  Compania Minera

Almost no diversification

The 3 months correlation between Compania and Compania is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Compania de Minas and Compania Minera Atacocha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Minera Atacocha and Compania 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 Compania de Minas are associated (or correlated) with Compania Minera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Minera Atacocha has no effect on the direction of Compania i.e., Compania and Compania Minera go up and down completely randomly.

Pair Corralation between Compania and Compania Minera

Assuming the 90 days trading horizon Compania is expected to generate 2.29 times less return on investment than Compania Minera. But when comparing it to its historical volatility, Compania de Minas is 1.73 times less risky than Compania Minera. It trades about 0.16 of its potential returns per unit of risk. Compania Minera Atacocha is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  6.30  in Compania Minera Atacocha on July 29, 2025 and sell it today you would earn a total of  4.70  from holding Compania Minera Atacocha or generate 74.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Compania de Minas  vs.  Compania Minera Atacocha

Compania de Minas

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compania de Minas are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Compania displayed solid returns over the last few months and may actually be approaching a breakup point.

Compania Minera Atacocha

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Compania Minera Atacocha are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental drivers, Compania Minera exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Compania and Compania Minera

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

The idea behind Compania de Minas and Compania Minera Atacocha 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.