Correlation Between CoStar and METISA Metalrgica
Can any of the company-specific risk be diversified away by investing in both CoStar and METISA Metalrgica 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 CoStar and METISA Metalrgica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CoStar Group and METISA Metalrgica Timboense, you can compare the effects of market volatilities on CoStar and METISA Metalrgica 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 CoStar with a short position of METISA Metalrgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoStar and METISA Metalrgica.
Diversification Opportunities for CoStar and METISA Metalrgica
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between CoStar and METISA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding CoStar Group and METISA Metalrgica Timboense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METISA Metalrgica and CoStar 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 CoStar Group are associated (or correlated) with METISA Metalrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METISA Metalrgica has no effect on the direction of CoStar i.e., CoStar and METISA Metalrgica go up and down completely randomly.
Pair Corralation between CoStar and METISA Metalrgica
Assuming the 90 days trading horizon CoStar Group is expected to generate 0.93 times more return on investment than METISA Metalrgica. However, CoStar Group is 1.07 times less risky than METISA Metalrgica. It trades about 0.3 of its potential returns per unit of risk. METISA Metalrgica Timboense is currently generating about 0.07 per unit of risk. If you would invest 424.00 in CoStar Group on September 2, 2024 and sell it today you would earn a total of 62.00 from holding CoStar Group or generate 14.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CoStar Group vs. METISA Metalrgica Timboense
Performance |
| Timeline |
| CoStar Group |
| METISA Metalrgica |
CoStar and METISA Metalrgica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CoStar and METISA Metalrgica
The main advantage of trading using opposite CoStar and METISA Metalrgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoStar position performs unexpectedly, METISA Metalrgica 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 METISA Metalrgica will offset losses from the drop in METISA Metalrgica's long position.| CoStar vs. NXP Semiconductors NV | CoStar vs. Autohome | CoStar vs. Multilaser Industrial SA | CoStar vs. United Rentals |
| METISA Metalrgica vs. Fras le SA | METISA Metalrgica vs. PBG SA | METISA Metalrgica vs. Springs Global Participaes | METISA Metalrgica vs. Indstrias Romi 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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