Correlation Between Lupatech and Usinas Siderrgicas
Can any of the company-specific risk be diversified away by investing in both Lupatech 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 Lupatech and Usinas Siderrgicas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Usinas Siderrgicas de, you can compare the effects of market volatilities on Lupatech 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 Lupatech with a short position of Usinas Siderrgicas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Usinas Siderrgicas.
Diversification Opportunities for Lupatech and Usinas Siderrgicas
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lupatech and Usinas is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech 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 Lupatech 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 Lupatech 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 Lupatech i.e., Lupatech and Usinas Siderrgicas go up and down completely randomly.
Pair Corralation between Lupatech and Usinas Siderrgicas
Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Usinas Siderrgicas. In addition to that, Lupatech is 1.34 times more volatile than Usinas Siderrgicas de. It trades about -0.03 of its total potential returns per unit of risk. Usinas Siderrgicas de is currently generating about 0.01 per unit of volatility. If you would invest 1,397 in Usinas Siderrgicas de on September 12, 2024 and sell it today you would lose (23.00) from holding Usinas Siderrgicas de or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Lupatech SA vs. Usinas Siderrgicas de
Performance |
| Timeline |
| Lupatech SA |
| Usinas Siderrgicas |
Lupatech and Usinas Siderrgicas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and Usinas Siderrgicas
The main advantage of trading using opposite Lupatech and Usinas Siderrgicas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech 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.| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Gafisa SA |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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