Correlation Between METISA Metalrgica and Credit Acceptance
Can any of the company-specific risk be diversified away by investing in both METISA Metalrgica and Credit Acceptance 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 Credit Acceptance 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 Credit Acceptance, you can compare the effects of market volatilities on METISA Metalrgica and Credit Acceptance 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 Credit Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of METISA Metalrgica and Credit Acceptance.
Diversification Opportunities for METISA Metalrgica and Credit Acceptance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between METISA and Credit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and Credit Acceptance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Acceptance 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 Credit Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Acceptance has no effect on the direction of METISA Metalrgica i.e., METISA Metalrgica and Credit Acceptance go up and down completely randomly.
Pair Corralation between METISA Metalrgica and Credit Acceptance
Assuming the 90 days trading horizon METISA Metalrgica Timboense is expected to under-perform the Credit Acceptance. In addition to that, METISA Metalrgica is 1.67 times more volatile than Credit Acceptance. It trades about -0.08 of its total potential returns per unit of risk. Credit Acceptance is currently generating about 0.09 per unit of volatility. If you would invest 28,532 in Credit Acceptance on August 26, 2024 and sell it today you would earn a total of 3,968 from holding Credit Acceptance or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
METISA Metalrgica Timboense vs. Credit Acceptance
Performance |
| Timeline |
| METISA Metalrgica |
| Credit Acceptance |
METISA Metalrgica and Credit Acceptance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METISA Metalrgica and Credit Acceptance
The main advantage of trading using opposite METISA Metalrgica and Credit Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METISA Metalrgica position performs unexpectedly, Credit Acceptance 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 Credit Acceptance will offset losses from the drop in Credit Acceptance's long position.| METISA Metalrgica vs. Schulz SA | METISA Metalrgica vs. Fras le SA | METISA Metalrgica vs. PBG SA | METISA Metalrgica vs. Springs Global Participaes |
| Credit Acceptance vs. Tyson Foods | Credit Acceptance vs. Brpr Corporate Offices | Credit Acceptance vs. Take Two Interactive Software | Credit Acceptance vs. TAL Education Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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