Correlation Between Metalfrio Solutions and Oi SA
Can any of the company-specific risk be diversified away by investing in both Metalfrio Solutions and Oi 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 Metalfrio Solutions and Oi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metalfrio Solutions SA and Oi SA, you can compare the effects of market volatilities on Metalfrio Solutions and Oi 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 Metalfrio Solutions with a short position of Oi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalfrio Solutions and Oi SA.
Diversification Opportunities for Metalfrio Solutions and Oi SA
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metalfrio and OIBR4 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Metalfrio Solutions SA and Oi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oi SA and Metalfrio Solutions 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 Metalfrio Solutions SA are associated (or correlated) with Oi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oi SA has no effect on the direction of Metalfrio Solutions i.e., Metalfrio Solutions and Oi SA go up and down completely randomly.
Pair Corralation between Metalfrio Solutions and Oi SA
Assuming the 90 days trading horizon Metalfrio Solutions is expected to generate 15.39 times less return on investment than Oi SA. But when comparing it to its historical volatility, Metalfrio Solutions SA is 13.57 times less risky than Oi SA. It trades about 0.08 of its potential returns per unit of risk. Oi SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,950 in Oi SA on September 12, 2024 and sell it today you would lose (2,009) from holding Oi SA or give up 68.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.87% |
| Values | Daily Returns |
Metalfrio Solutions SA vs. Oi SA
Performance |
| Timeline |
| Metalfrio Solutions |
| Oi SA |
Metalfrio Solutions and Oi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalfrio Solutions and Oi SA
The main advantage of trading using opposite Metalfrio Solutions and Oi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalfrio Solutions position performs unexpectedly, Oi 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 Oi SA will offset losses from the drop in Oi SA's long position.| Metalfrio Solutions vs. Lupatech SA | Metalfrio Solutions vs. Recrusul SA | Metalfrio Solutions vs. Fundo Investimento Imobiliario | Metalfrio Solutions vs. LESTE FDO INV |
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 CEOs Directory module to screen CEOs from public companies around the world.
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