Correlation Between Synalloy and Companhia Siderurgica
Can any of the company-specific risk be diversified away by investing in both Synalloy and Companhia Siderurgica 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 Synalloy and Companhia Siderurgica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synalloy and Companhia Siderurgica Nacional, you can compare the effects of market volatilities on Synalloy and Companhia Siderurgica 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 Synalloy with a short position of Companhia Siderurgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synalloy and Companhia Siderurgica.
Diversification Opportunities for Synalloy and Companhia Siderurgica
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Synalloy and Companhia is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Synalloy and Companhia Siderurgica Nacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Siderurgica and Synalloy 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 Synalloy are associated (or correlated) with Companhia Siderurgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Siderurgica has no effect on the direction of Synalloy i.e., Synalloy and Companhia Siderurgica go up and down completely randomly.
Pair Corralation between Synalloy and Companhia Siderurgica
Given the investment horizon of 90 days Synalloy is expected to generate 0.8 times more return on investment than Companhia Siderurgica. However, Synalloy is 1.25 times less risky than Companhia Siderurgica. It trades about 0.02 of its potential returns per unit of risk. Companhia Siderurgica Nacional is currently generating about -0.08 per unit of risk. If you would invest 1,053 in Synalloy on November 9, 2024 and sell it today you would earn a total of 62.00 from holding Synalloy or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synalloy vs. Companhia Siderurgica Nacional
Performance |
| Timeline |
| Synalloy |
| Companhia Siderurgica |
Synalloy and Companhia Siderurgica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synalloy and Companhia Siderurgica
The main advantage of trading using opposite Synalloy and Companhia Siderurgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synalloy position performs unexpectedly, Companhia Siderurgica 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 Companhia Siderurgica will offset losses from the drop in Companhia Siderurgica's long position.| Synalloy vs. Grupo Simec SAB | Synalloy vs. Mesabi Trust | Synalloy vs. Algoma Steel Group | Synalloy vs. Aperam PK |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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