Correlation Between Embraer SA and Companhia Siderrgica
Can any of the company-specific risk be diversified away by investing in both Embraer SA and Companhia Siderrgica 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 Embraer SA and Companhia Siderrgica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embraer SA and Companhia Siderrgica Nacional, you can compare the effects of market volatilities on Embraer SA and Companhia Siderrgica 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 Embraer SA with a short position of Companhia Siderrgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embraer SA and Companhia Siderrgica.
Diversification Opportunities for Embraer SA and Companhia Siderrgica
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Embraer and Companhia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Embraer SA and Companhia Siderrgica Nacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Siderrgica and Embraer SA 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 Embraer SA are associated (or correlated) with Companhia Siderrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Siderrgica has no effect on the direction of Embraer SA i.e., Embraer SA and Companhia Siderrgica go up and down completely randomly.
Pair Corralation between Embraer SA and Companhia Siderrgica
If you would invest (100.00) in Embraer SA on October 25, 2024 and sell it today you would earn a total of 100.00 from holding Embraer SA or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Embraer SA vs. Companhia Siderrgica Nacional
Performance |
| Timeline |
| Embraer SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Companhia Siderrgica |
Embraer SA and Companhia Siderrgica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embraer SA and Companhia Siderrgica
The main advantage of trading using opposite Embraer SA and Companhia Siderrgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embraer SA position performs unexpectedly, Companhia Siderrgica 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 Companhia Siderrgica will offset losses from the drop in Companhia Siderrgica's long position.| Embraer SA vs. Gol Linhas Areas | Embraer SA vs. Gerdau SA | Embraer SA vs. Companhia Siderrgica Nacional | Embraer SA vs. Usinas Siderrgicas de |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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