Correlation Between Consultatio and Ternium SA
Can any of the company-specific risk be diversified away by investing in both Consultatio and Ternium 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 Consultatio and Ternium SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consultatio SA and Ternium SA DRC, you can compare the effects of market volatilities on Consultatio and Ternium 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 Consultatio with a short position of Ternium SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consultatio and Ternium SA.
Diversification Opportunities for Consultatio and Ternium SA
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Consultatio and Ternium is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Consultatio SA and Ternium SA DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ternium SA DRC and Consultatio 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 Consultatio SA are associated (or correlated) with Ternium SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ternium SA DRC has no effect on the direction of Consultatio i.e., Consultatio and Ternium SA go up and down completely randomly.
Pair Corralation between Consultatio and Ternium SA
Assuming the 90 days trading horizon Consultatio SA is expected to generate 2.2 times more return on investment than Ternium SA. However, Consultatio is 2.2 times more volatile than Ternium SA DRC. It trades about 0.11 of its potential returns per unit of risk. Ternium SA DRC is currently generating about 0.09 per unit of risk. If you would invest 242,000 in Consultatio SA on October 24, 2024 and sell it today you would earn a total of 11,000 from holding Consultatio SA or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consultatio SA vs. Ternium SA DRC
Performance |
| Timeline |
| Consultatio SA |
| Ternium SA DRC |
Consultatio and Ternium SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consultatio and Ternium SA
The main advantage of trading using opposite Consultatio and Ternium SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consultatio position performs unexpectedly, Ternium 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 Ternium SA will offset losses from the drop in Ternium SA's long position.| Consultatio vs. United States Steel | Consultatio vs. Compania de Transporte | Consultatio vs. Harmony Gold Mining |
| Ternium SA vs. Transportadora de Gas | Ternium SA vs. Harmony Gold Mining | Ternium SA vs. Telecom Argentina | Ternium SA vs. Compania de Transporte |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |