Correlation Between Companhia Siderrgica and Minerva SA
Can any of the company-specific risk be diversified away by investing in both Companhia Siderrgica and Minerva SA 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 Companhia Siderrgica and Minerva SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Siderrgica Nacional and Minerva SA, you can compare the effects of market volatilities on Companhia Siderrgica and Minerva SA 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 Companhia Siderrgica with a short position of Minerva SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderrgica and Minerva SA.
Diversification Opportunities for Companhia Siderrgica and Minerva SA
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Companhia and Minerva is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderrgica Nacional and Minerva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerva SA and Companhia Siderrgica 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 Companhia Siderrgica Nacional are associated (or correlated) with Minerva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerva SA has no effect on the direction of Companhia Siderrgica i.e., Companhia Siderrgica and Minerva SA go up and down completely randomly.
Pair Corralation between Companhia Siderrgica and Minerva SA
Assuming the 90 days trading horizon Companhia Siderrgica Nacional is expected to generate 1.02 times more return on investment than Minerva SA. However, Companhia Siderrgica is 1.02 times more volatile than Minerva SA. It trades about 0.02 of its potential returns per unit of risk. Minerva SA is currently generating about -0.06 per unit of risk. If you would invest 1,059 in Companhia Siderrgica Nacional on August 28, 2024 and sell it today you would earn a total of 66.00 from holding Companhia Siderrgica Nacional or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.87% |
| Values | Daily Returns |
Companhia Siderrgica Nacional vs. Minerva SA
Performance |
| Timeline |
| Companhia Siderrgica |
| Minerva SA |
Companhia Siderrgica and Minerva SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Siderrgica and Minerva SA
The main advantage of trading using opposite Companhia Siderrgica and Minerva SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Siderrgica position performs unexpectedly, Minerva SA 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 Minerva SA will offset losses from the drop in Minerva SA's long position.| Companhia Siderrgica vs. Companhia de Gs | Companhia Siderrgica vs. Rede Energia Participaes | Companhia Siderrgica vs. CTEEP Companhia | Companhia Siderrgica vs. Rio Paranapanema Energia |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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