Correlation Between METISA Metalrgica and PBG SA
Can any of the company-specific risk be diversified away by investing in both METISA Metalrgica and PBG 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 METISA Metalrgica and PBG SA 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 PBG SA, you can compare the effects of market volatilities on METISA Metalrgica and PBG 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 METISA Metalrgica with a short position of PBG SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of METISA Metalrgica and PBG SA.
Diversification Opportunities for METISA Metalrgica and PBG SA
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between METISA and PBG is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and PBG SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBG SA 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 PBG SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBG SA has no effect on the direction of METISA Metalrgica i.e., METISA Metalrgica and PBG SA go up and down completely randomly.
Pair Corralation between METISA Metalrgica and PBG SA
Assuming the 90 days trading horizon METISA Metalrgica Timboense is expected to generate 0.61 times more return on investment than PBG SA. However, METISA Metalrgica Timboense is 1.65 times less risky than PBG SA. It trades about 0.12 of its potential returns per unit of risk. PBG SA is currently generating about 0.02 per unit of risk. If you would invest 3,500 in METISA Metalrgica Timboense on September 1, 2024 and sell it today you would earn a total of 200.00 from holding METISA Metalrgica Timboense or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
METISA Metalrgica Timboense vs. PBG SA
Performance |
| Timeline |
| METISA Metalrgica |
| PBG SA |
METISA Metalrgica and PBG SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METISA Metalrgica and PBG SA
The main advantage of trading using opposite METISA Metalrgica and PBG SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METISA Metalrgica position performs unexpectedly, PBG 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 PBG SA will offset losses from the drop in PBG SA's 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 |
| PBG SA vs. METISA Metalrgica Timboense | PBG SA vs. Lupatech SA | PBG SA vs. Fras le SA | PBG SA vs. Energisa 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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