Correlation Between Capex SA and United States

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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

CapexUnitedDiversified AwayCapexUnitedDiversified Away100%
-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Capex and United is -0.72. 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 1.0 times more return on investment than United States. However, Capex SA is 1.0 times more volatile than United States Steel. It trades about 0.13 of its potential returns per unit of risk. United States Steel is currently generating about 0.1 per unit of risk. If you would invest  68,100  in Capex SA on November 30, 2024 and sell it today you would earn a total of  546,900  from holding Capex SA or generate 803.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Capex SA  vs.  United States Steel

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-505
JavaScript chart by amCharts 3.21.15CAPX X
       Timeline  
Capex SA 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Capex 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 3.21.15JanFebFeb6,0006,5007,0007,5008,0008,5009,0009,50010,000
United States Steel 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in United States Steel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, United States may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15JanFebFeb12,00013,00014,00015,00016,000

Capex SA and United States Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.39-4.78-3.18-1.580.01.392.824.265.697.13 0.0250.0300.0350.0400.045
JavaScript chart by amCharts 3.21.15CAPX X
       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.
The idea behind Capex SA and United States Steel 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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