Correlation Between Cable One and Companhia Siderrgica
Can any of the company-specific risk be diversified away by investing in both Cable One and Companhia Siderrgica 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 Cable One and Companhia Siderrgica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Companhia Siderrgica Nacional, you can compare the effects of market volatilities on Cable One and Companhia Siderrgica 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 Cable One with a short position of Companhia Siderrgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Companhia Siderrgica.
Diversification Opportunities for Cable One and Companhia Siderrgica
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cable and Companhia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Companhia Siderrgica Nacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Siderrgica and Cable One 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 Cable One are associated (or correlated) with Companhia Siderrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Siderrgica has no effect on the direction of Cable One i.e., Cable One and Companhia Siderrgica go up and down completely randomly.
Pair Corralation between Cable One and Companhia Siderrgica
Assuming the 90 days trading horizon Cable One is expected to under-perform the Companhia Siderrgica. In addition to that, Cable One is 1.33 times more volatile than Companhia Siderrgica Nacional. It trades about -0.08 of its total potential returns per unit of risk. Companhia Siderrgica Nacional is currently generating about -0.02 per unit of volatility. If you would invest 1,305 in Companhia Siderrgica Nacional on November 19, 2024 and sell it today you would lose (431.00) from holding Companhia Siderrgica Nacional or give up 33.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 43.41% |
| Values | Daily Returns |
Cable One vs. Companhia Siderrgica Nacional
Performance |
| Timeline |
| Cable One |
| Companhia Siderrgica |
Cable One and Companhia Siderrgica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Companhia Siderrgica
The main advantage of trading using opposite Cable One and Companhia Siderrgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, Companhia Siderrgica 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 Siderrgica will offset losses from the drop in Companhia Siderrgica's long position.| Cable One vs. Verizon Communications | Cable One vs. TAL Education Group | Cable One vs. Liberty Broadband | Cable One vs. Credit Acceptance |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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