Correlation Between AES Brasil and CSN Minerao
Can any of the company-specific risk be diversified away by investing in both AES Brasil and CSN Minerao 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 AES Brasil and CSN Minerao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AES Brasil Energia and CSN Minerao SA, you can compare the effects of market volatilities on AES Brasil and CSN Minerao 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 AES Brasil with a short position of CSN Minerao. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES Brasil and CSN Minerao.
Diversification Opportunities for AES Brasil and CSN Minerao
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AES and CSN is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding AES Brasil Energia and CSN Minerao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSN Minerao SA and AES Brasil 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 AES Brasil Energia are associated (or correlated) with CSN Minerao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSN Minerao SA has no effect on the direction of AES Brasil i.e., AES Brasil and CSN Minerao go up and down completely randomly.
Pair Corralation between AES Brasil and CSN Minerao
If you would invest 811.00 in AES Brasil Energia on September 1, 2024 and sell it today you would earn a total of 0.00 from holding AES Brasil Energia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 9.52% |
| Values | Daily Returns |
AES Brasil Energia vs. CSN Minerao SA
Performance |
| Timeline |
| AES Brasil Energia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CSN Minerao SA |
AES Brasil and CSN Minerao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AES Brasil and CSN Minerao
The main advantage of trading using opposite AES Brasil and CSN Minerao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES Brasil position performs unexpectedly, CSN Minerao 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 CSN Minerao will offset losses from the drop in CSN Minerao's long position.| AES Brasil vs. CTEEP Companhia | AES Brasil vs. Transmissora Aliana de | AES Brasil vs. Engie Brasil Energia | AES Brasil vs. BB Seguridade Participacoes |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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