Correlation Between Fras Le and Usinas Siderrgicas
Can any of the company-specific risk be diversified away by investing in both Fras Le 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 Fras Le and Usinas Siderrgicas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fras le SA and Usinas Siderrgicas de, you can compare the effects of market volatilities on Fras Le 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 Fras Le with a short position of Usinas Siderrgicas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fras Le and Usinas Siderrgicas.
Diversification Opportunities for Fras Le and Usinas Siderrgicas
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fras and Usinas is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Fras le SA and Usinas Siderrgicas de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usinas Siderrgicas and Fras Le 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 Fras le SA 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 Fras Le i.e., Fras Le and Usinas Siderrgicas go up and down completely randomly.
Pair Corralation between Fras Le and Usinas Siderrgicas
Assuming the 90 days trading horizon Fras le SA is expected to under-perform the Usinas Siderrgicas. But the stock apears to be less risky and, when comparing its historical volatility, Fras le SA is 1.53 times less risky than Usinas Siderrgicas. The stock trades about -0.09 of its potential returns per unit of risk. The Usinas Siderrgicas de is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 608.00 in Usinas Siderrgicas de on September 2, 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fras le SA vs. Usinas Siderrgicas de
Performance |
| Timeline |
| Fras le SA |
| Usinas Siderrgicas |
Fras Le and Usinas Siderrgicas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fras Le and Usinas Siderrgicas
The main advantage of trading using opposite Fras Le and Usinas Siderrgicas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fras Le 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.| Fras Le vs. Engie Brasil Energia | Fras Le vs. Energisa SA | Fras Le vs. Clave Indices De | Fras Le vs. BTG Pactual Logstica |
| Usinas Siderrgicas vs. Companhia Paranaense de | Usinas Siderrgicas vs. Fras le SA | Usinas Siderrgicas vs. Energisa SA | Usinas Siderrgicas vs. Clave Indices 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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