Correlation Between Companhia Siderrgica and United States
Can any of the company-specific risk be diversified away by investing in both Companhia Siderrgica 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 Companhia Siderrgica and United States 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 United States Steel, you can compare the effects of market volatilities on Companhia Siderrgica 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 Companhia Siderrgica with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderrgica and United States.
Diversification Opportunities for Companhia Siderrgica and United States
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Companhia and United is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderrgica Nacional 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 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 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 Companhia Siderrgica i.e., Companhia Siderrgica and United States go up and down completely randomly.
Pair Corralation between Companhia Siderrgica and United States
Assuming the 90 days trading horizon Companhia Siderrgica Nacional is expected to generate 2.03 times more return on investment than United States. However, Companhia Siderrgica is 2.03 times more volatile than United States Steel. It trades about 0.12 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 813.00 in Companhia Siderrgica Nacional on November 18, 2024 and sell it today you would earn a total of 61.00 from holding Companhia Siderrgica Nacional or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Siderrgica Nacional vs. United States Steel
Performance |
| Timeline |
| Companhia Siderrgica |
| United States Steel |
Companhia Siderrgica and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Siderrgica and United States
The main advantage of trading using opposite Companhia Siderrgica and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Siderrgica 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.| Companhia Siderrgica vs. Check Point Software | Companhia Siderrgica vs. British American Tobacco | Companhia Siderrgica vs. Hospital Mater Dei | Companhia Siderrgica vs. CVS Health |
| United States vs. Medical Properties Trust, | United States vs. Patria Investments Limited | United States vs. TC Traders Club | United States vs. Take Two Interactive Software |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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