Correlation Between Cosan SA and Usinas Siderrgicas
Can any of the company-specific risk be diversified away by investing in both Cosan SA and Usinas Siderrgicas 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 Cosan SA and Usinas Siderrgicas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan SA and Usinas Siderrgicas de, you can compare the effects of market volatilities on Cosan SA and Usinas Siderrgicas 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 Cosan SA with a short position of Usinas Siderrgicas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan SA and Usinas Siderrgicas.
Diversification Opportunities for Cosan SA and Usinas Siderrgicas
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cosan and Usinas is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA and Usinas Siderrgicas de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usinas Siderrgicas and Cosan 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 Cosan SA are associated (or correlated) with Usinas Siderrgicas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usinas Siderrgicas has no effect on the direction of Cosan SA i.e., Cosan SA and Usinas Siderrgicas go up and down completely randomly.
Pair Corralation between Cosan SA and Usinas Siderrgicas
Assuming the 90 days trading horizon Cosan SA is expected to under-perform the Usinas Siderrgicas. But the stock apears to be less risky and, when comparing its historical volatility, Cosan SA is 1.78 times less risky than Usinas Siderrgicas. The stock trades about -0.1 of its potential returns per unit of risk. The Usinas Siderrgicas de is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 801.00 in Usinas Siderrgicas de on August 24, 2024 and sell it today you would lose (196.00) from holding Usinas Siderrgicas de or give up 24.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosan SA vs. Usinas Siderrgicas de
Performance |
| Timeline |
| Cosan SA |
| Usinas Siderrgicas |
Cosan SA and Usinas Siderrgicas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosan SA and Usinas Siderrgicas
The main advantage of trading using opposite Cosan SA and Usinas Siderrgicas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA position performs unexpectedly, Usinas Siderrgicas 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 Usinas Siderrgicas will offset losses from the drop in Usinas Siderrgicas' long position.| Cosan SA vs. Braskem SA | Cosan SA vs. Cyrela Brazil Realty | Cosan SA vs. CCR SA | Cosan SA vs. Lojas Renner SA |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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