Correlation Between Minera Frisco and Vale SA
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By analyzing existing cross correlation between Minera Frisco SAB and Vale SA, you can compare the effects of market volatilities on Minera Frisco and Vale 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 Minera Frisco with a short position of Vale SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minera Frisco and Vale SA.
Diversification Opportunities for Minera Frisco and Vale SA
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Minera and Vale is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Minera Frisco SAB and Vale SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vale SA and Minera Frisco 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 Minera Frisco SAB are associated (or correlated) with Vale SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vale SA has no effect on the direction of Minera Frisco i.e., Minera Frisco and Vale SA go up and down completely randomly.
Pair Corralation between Minera Frisco and Vale SA
Assuming the 90 days trading horizon Minera Frisco SAB is expected to under-perform the Vale SA. In addition to that, Minera Frisco is 2.01 times more volatile than Vale SA. It trades about -0.05 of its total potential returns per unit of risk. Vale SA is currently generating about -0.03 per unit of volatility. If you would invest 20,800 in Vale SA on August 25, 2024 and sell it today you would lose (300.00) from holding Vale SA or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minera Frisco SAB vs. Vale SA
Performance |
| Timeline |
| Minera Frisco SAB |
| Vale SA |
Minera Frisco and Vale SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minera Frisco and Vale SA
The main advantage of trading using opposite Minera Frisco and Vale SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minera Frisco position performs unexpectedly, Vale 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 Vale SA will offset losses from the drop in Vale SA's long position.| Minera Frisco vs. Genworth Financial | Minera Frisco vs. McEwen Mining | Minera Frisco vs. Prudential Financial | Minera Frisco vs. United Airlines Holdings |
| Vale SA vs. Rio Tinto Group | Vale SA vs. Glencore plc | Vale SA vs. Cleveland Cliffs | Vale SA vs. Minera Frisco SAB |
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 Correlations module to find global opportunities by holding instruments from different markets.
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