Correlation Between Minerva SA and Vale SA
Can any of the company-specific risk be diversified away by investing in both Minerva SA and Vale SA 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 Minerva SA and Vale SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minerva SA and Vale SA, you can compare the effects of market volatilities on Minerva SA and Vale SA 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 Minerva SA with a short position of Vale SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerva SA and Vale SA.
Diversification Opportunities for Minerva SA and Vale SA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Minerva and Vale is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Minerva SA and Vale SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale SA and Minerva SA 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 Minerva SA are associated (or correlated) with Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA has no effect on the direction of Minerva SA i.e., Minerva SA and Vale SA go up and down completely randomly.
Pair Corralation between Minerva SA and Vale SA
Assuming the 90 days trading horizon Minerva SA is expected to under-perform the Vale SA. In addition to that, Minerva SA is 2.27 times more volatile than Vale SA. It trades about -0.03 of its total potential returns per unit of risk. Vale SA is currently generating about 0.2 per unit of volatility. If you would invest 5,155 in Vale SA on November 9, 2024 and sell it today you would earn a total of 358.00 from holding Vale SA or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minerva SA vs. Vale SA
Performance |
| Timeline |
| Minerva SA |
| Vale SA |
Minerva SA and Vale SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minerva SA and Vale SA
The main advantage of trading using opposite Minerva SA and Vale SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerva SA position performs unexpectedly, Vale SA 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 Vale SA will offset losses from the drop in Vale SA's long position.| Minerva SA vs. Marfrig Global Foods | Minerva SA vs. JBS SA | Minerva SA vs. BRF SA | Minerva SA vs. SLC Agrcola SA |
| Vale SA vs. Petrleo Brasileiro SA | Vale SA vs. Banco do Brasil | Vale SA vs. Ita Unibanco Holding | Vale SA vs. Banco Bradesco SA |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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