Correlation Between Boldt SA and Ternium SA

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Can any of the company-specific risk be diversified away by investing in both Boldt SA and Ternium 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 Boldt SA and Ternium SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boldt SA and Ternium SA DRC, you can compare the effects of market volatilities on Boldt SA and Ternium 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 Boldt SA with a short position of Ternium SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boldt SA and Ternium SA.

Diversification Opportunities for Boldt SA and Ternium SA

BoldtTerniumDiversified AwayBoldtTerniumDiversified Away100%
-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Boldt and Ternium is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Boldt SA and Ternium SA DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ternium SA DRC and Boldt 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 Boldt SA are associated (or correlated) with Ternium SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ternium SA DRC has no effect on the direction of Boldt SA i.e., Boldt SA and Ternium SA go up and down completely randomly.

Pair Corralation between Boldt SA and Ternium SA

Assuming the 90 days trading horizon Boldt SA is expected to generate 1.59 times more return on investment than Ternium SA. However, Boldt SA is 1.59 times more volatile than Ternium SA DRC. It trades about 0.1 of its potential returns per unit of risk. Ternium SA DRC is currently generating about 0.03 per unit of risk. If you would invest  677.00  in Boldt SA on November 30, 2024 and sell it today you would earn a total of  3,503  from holding Boldt SA or generate 517.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Boldt SA  vs.  Ternium SA DRC

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510152025
JavaScript chart by amCharts 3.21.15BOLT TXR
       Timeline  
Boldt SA 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Boldt SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15JanFebFeb455055
Ternium SA DRC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ternium SA DRC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ternium SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15JanFebFeb8,4008,6008,8009,0009,2009,4009,600

Boldt SA and Ternium SA Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.13-2.35-1.56-0.77-0.01310.641.291.952.613.27 0.060.070.080.090.100.110.120.13
JavaScript chart by amCharts 3.21.15BOLT TXR
       Returns  

Pair Trading with Boldt SA and Ternium SA

The main advantage of trading using opposite Boldt SA and Ternium SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boldt SA position performs unexpectedly, Ternium 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 Ternium SA will offset losses from the drop in Ternium SA's long position.
The idea behind Boldt SA and Ternium SA DRC 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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