Correlation Between Cerro De and Power Nickel

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

By analyzing existing cross correlation between Cerro de Pasco and Power Nickel, you can compare the effects of market volatilities on Cerro De and Power Nickel 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 Cerro De with a short position of Power Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cerro De and Power Nickel.

Diversification Opportunities for Cerro De and Power Nickel

0.7

Correlation Coefficient

Cerro De  Power Nickel

Poor diversification

The 3 months correlation between Cerro and Power is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cerro de Pasco and Power Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Nickel and Cerro De 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 Cerro de Pasco are associated (or correlated) with Power Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Nickel has no effect on the direction of Cerro De i.e., Cerro De and Power Nickel go up and down completely randomly.

Pair Corralation between Cerro De and Power Nickel

Assuming the 90 days horizon Cerro de Pasco is expected to generate 0.89 times more return on investment than Power Nickel. However, Cerro de Pasco is 1.12 times less risky than Power Nickel. It trades about -0.02 of its potential returns per unit of risk. Power Nickel is currently generating about -0.12 per unit of risk. If you would invest  35.00  in Cerro de Pasco on September 4, 2025 and sell it today you would lose (3.00) from holding Cerro de Pasco or give up 8.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Cerro de Pasco  vs.  Power Nickel

Cerro de Pasco

Risk-Adjusted Performance

Weakest

Over the last 90 days Cerro de Pasco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cerro De is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Power Nickel

Risk-Adjusted Performance

Weakest

Over the last 90 days Power Nickel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2026. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cerro De and Power Nickel

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

The idea behind Cerro de Pasco and Power Nickel 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.