Correlation Between Capex SA and United States
Can any of the company-specific risk be diversified away by investing in both Capex SA and United States 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 Capex SA and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capex SA and United States Steel, you can compare the effects of market volatilities on Capex SA and United States 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 Capex SA with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capex SA and United States.
Diversification Opportunities for Capex SA and United States
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capex and United is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel and Capex 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 Capex SA are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Capex SA i.e., Capex SA and United States go up and down completely randomly.
Pair Corralation between Capex SA and United States
Assuming the 90 days trading horizon Capex SA is expected to generate 0.62 times more return on investment than United States. However, Capex SA is 1.61 times less risky than United States. It trades about 0.29 of its potential returns per unit of risk. United States Steel is currently generating about -0.03 per unit of risk. If you would invest 620,000 in Capex SA on August 26, 2024 and sell it today you would earn a total of 90,000 from holding Capex SA or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capex SA vs. United States Steel
Performance |
| Timeline |
| Capex SA |
| United States Steel |
Capex SA and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capex SA and United States
The main advantage of trading using opposite Capex SA and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capex SA position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Capex SA vs. Transportadora de Gas | Capex SA vs. Harmony Gold Mining | Capex SA vs. Agrometal SAI | Capex SA vs. Compania de Transporte |
| United States vs. Telecom Argentina | United States vs. Harmony Gold Mining | United States vs. Agrometal SAI | United States vs. Compania de Transporte |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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