Correlation Between Electro Ao and METISA Metalrgica
Can any of the company-specific risk be diversified away by investing in both Electro Ao and METISA Metalrgica 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 Electro Ao and METISA Metalrgica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electro Ao Altona and METISA Metalrgica Timboense, you can compare the effects of market volatilities on Electro Ao and METISA Metalrgica 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 Electro Ao with a short position of METISA Metalrgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electro Ao and METISA Metalrgica.
Diversification Opportunities for Electro Ao and METISA Metalrgica
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Electro and METISA is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Electro Ao Altona and METISA Metalrgica Timboense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METISA Metalrgica and Electro Ao 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 Electro Ao Altona are associated (or correlated) with METISA Metalrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METISA Metalrgica has no effect on the direction of Electro Ao i.e., Electro Ao and METISA Metalrgica go up and down completely randomly.
Pair Corralation between Electro Ao and METISA Metalrgica
Assuming the 90 days trading horizon Electro Ao Altona is expected to generate 0.98 times more return on investment than METISA Metalrgica. However, Electro Ao Altona is 1.02 times less risky than METISA Metalrgica. It trades about 0.15 of its potential returns per unit of risk. METISA Metalrgica Timboense is currently generating about 0.12 per unit of risk. If you would invest 1,326 in Electro Ao Altona on September 1, 2024 and sell it today you would earn a total of 102.00 from holding Electro Ao Altona or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Electro Ao Altona vs. METISA Metalrgica Timboense
Performance |
| Timeline |
| Electro Ao Altona |
| METISA Metalrgica |
Electro Ao and METISA Metalrgica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electro Ao and METISA Metalrgica
The main advantage of trading using opposite Electro Ao and METISA Metalrgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electro Ao position performs unexpectedly, METISA Metalrgica 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 METISA Metalrgica will offset losses from the drop in METISA Metalrgica's long position.| Electro Ao vs. Apartment Investment and | Electro Ao vs. Metalurgica Gerdau SA | Electro Ao vs. Tres Tentos Agroindustrial | Electro Ao vs. GP Investments |
| METISA Metalrgica vs. Fras le SA | METISA Metalrgica vs. PBG SA | METISA Metalrgica vs. Springs Global Participaes | METISA Metalrgica vs. Indstrias Romi SA |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |