Correlation Between Electro Ao and Usinas Siderrgicas
Can any of the company-specific risk be diversified away by investing in both Electro Ao and Usinas Siderrgicas 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 Usinas Siderrgicas 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 Usinas Siderrgicas de, you can compare the effects of market volatilities on Electro Ao and Usinas Siderrgicas 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 Usinas Siderrgicas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electro Ao and Usinas Siderrgicas.
Diversification Opportunities for Electro Ao and Usinas Siderrgicas
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Electro and Usinas is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Electro Ao Altona and Usinas Siderrgicas de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usinas Siderrgicas 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 Usinas Siderrgicas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usinas Siderrgicas has no effect on the direction of Electro Ao i.e., Electro Ao and Usinas Siderrgicas go up and down completely randomly.
Pair Corralation between Electro Ao and Usinas Siderrgicas
Assuming the 90 days trading horizon Electro Ao Altona is expected to under-perform the Usinas Siderrgicas. In addition to that, Electro Ao is 1.23 times more volatile than Usinas Siderrgicas de. It trades about -0.15 of its total potential returns per unit of risk. Usinas Siderrgicas de is currently generating about 0.02 per unit of volatility. If you would invest 609.00 in Usinas Siderrgicas de on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Usinas Siderrgicas de or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electro Ao Altona vs. Usinas Siderrgicas de
Performance |
| Timeline |
| Electro Ao Altona |
| Usinas Siderrgicas |
Electro Ao and Usinas Siderrgicas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electro Ao and Usinas Siderrgicas
The main advantage of trading using opposite Electro Ao and Usinas Siderrgicas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electro Ao position performs unexpectedly, Usinas Siderrgicas 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 Usinas Siderrgicas will offset losses from the drop in Usinas Siderrgicas' long position.| Electro Ao vs. Usinas Siderrgicas de | Electro Ao vs. Gerdau SA | Electro Ao vs. Companhia Siderrgica Nacional | Electro Ao vs. Companhia Energtica de |
| Usinas Siderrgicas vs. Companhia Siderrgica Nacional | Usinas Siderrgicas vs. Gerdau SA | Usinas Siderrgicas vs. Metalurgica Gerdau SA | Usinas Siderrgicas vs. Companhia Energtica de |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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