Correlation Between Companhia Siderrgica and Camil Alimentos
Can any of the company-specific risk be diversified away by investing in both Companhia Siderrgica and Camil Alimentos 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 Camil Alimentos 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 Camil Alimentos SA, you can compare the effects of market volatilities on Companhia Siderrgica and Camil Alimentos 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 Camil Alimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderrgica and Camil Alimentos.
Diversification Opportunities for Companhia Siderrgica and Camil Alimentos
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Companhia and Camil is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderrgica Nacional and Camil Alimentos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camil Alimentos 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 Camil Alimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camil Alimentos SA has no effect on the direction of Companhia Siderrgica i.e., Companhia Siderrgica and Camil Alimentos go up and down completely randomly.
Pair Corralation between Companhia Siderrgica and Camil Alimentos
Assuming the 90 days trading horizon Companhia Siderrgica Nacional is expected to generate 1.98 times more return on investment than Camil Alimentos. However, Companhia Siderrgica is 1.98 times more volatile than Camil Alimentos SA. It trades about -0.04 of its potential returns per unit of risk. Camil Alimentos SA is currently generating about -0.15 per unit of risk. If you would invest 1,148 in Companhia Siderrgica Nacional on August 29, 2024 and sell it today you would lose (38.00) from holding Companhia Siderrgica Nacional or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Siderrgica Nacional vs. Camil Alimentos SA
Performance |
| Timeline |
| Companhia Siderrgica |
| Camil Alimentos SA |
Companhia Siderrgica and Camil Alimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Siderrgica and Camil Alimentos
The main advantage of trading using opposite Companhia Siderrgica and Camil Alimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Siderrgica position performs unexpectedly, Camil Alimentos 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 Camil Alimentos will offset losses from the drop in Camil Alimentos' 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 |
| Camil Alimentos vs. Minerva SA | Camil Alimentos vs. Companhia Siderrgica Nacional | Camil Alimentos vs. Cyrela Brazil Realty |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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