Correlation Between METISA Metalrgica and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both METISA Metalrgica and Booking Holdings 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 METISA Metalrgica and Booking Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METISA Metalrgica Timboense and Booking Holdings, you can compare the effects of market volatilities on METISA Metalrgica and Booking Holdings 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 METISA Metalrgica with a short position of Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of METISA Metalrgica and Booking Holdings.
Diversification Opportunities for METISA Metalrgica and Booking Holdings
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between METISA and Booking is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings and METISA Metalrgica 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 METISA Metalrgica Timboense are associated (or correlated) with Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of METISA Metalrgica i.e., METISA Metalrgica and Booking Holdings go up and down completely randomly.
Pair Corralation between METISA Metalrgica and Booking Holdings
Assuming the 90 days trading horizon METISA Metalrgica Timboense is expected to under-perform the Booking Holdings. In addition to that, METISA Metalrgica is 1.29 times more volatile than Booking Holdings. It trades about -0.1 of its total potential returns per unit of risk. Booking Holdings is currently generating about 0.33 per unit of volatility. If you would invest 12,311 in Booking Holdings on September 2, 2024 and sell it today you would earn a total of 5,294 from holding Booking Holdings or generate 43.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
METISA Metalrgica Timboense vs. Booking Holdings
Performance |
| Timeline |
| METISA Metalrgica |
| Booking Holdings |
METISA Metalrgica and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METISA Metalrgica and Booking Holdings
The main advantage of trading using opposite METISA Metalrgica and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METISA Metalrgica position performs unexpectedly, Booking Holdings 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 Booking Holdings will offset losses from the drop in Booking Holdings' long position.| METISA Metalrgica vs. Fras le SA | METISA Metalrgica vs. PBG SA | METISA Metalrgica vs. Springs Global Participaes | METISA Metalrgica vs. Indstrias Romi SA |
| Booking Holdings vs. Brpr Corporate Offices | Booking Holdings vs. Unifique Telecomunicaes SA | Booking Holdings vs. Autohome | Booking Holdings vs. Mangels Industrial SA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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