Correlation Between Iochpe Maxion and METISA Metalrgica
Can any of the company-specific risk be diversified away by investing in both Iochpe Maxion and METISA Metalrgica 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 Iochpe Maxion and METISA Metalrgica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iochpe Maxion SA and METISA Metalrgica Timboense, you can compare the effects of market volatilities on Iochpe Maxion and METISA Metalrgica 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 Iochpe Maxion with a short position of METISA Metalrgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iochpe Maxion and METISA Metalrgica.
Diversification Opportunities for Iochpe Maxion and METISA Metalrgica
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Iochpe and METISA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Iochpe Maxion SA and METISA Metalrgica Timboense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METISA Metalrgica and Iochpe Maxion 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 Iochpe Maxion SA are associated (or correlated) with METISA Metalrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METISA Metalrgica has no effect on the direction of Iochpe Maxion i.e., Iochpe Maxion and METISA Metalrgica go up and down completely randomly.
Pair Corralation between Iochpe Maxion and METISA Metalrgica
Assuming the 90 days trading horizon Iochpe Maxion SA is expected to generate 0.91 times more return on investment than METISA Metalrgica. However, Iochpe Maxion SA is 1.09 times less risky than METISA Metalrgica. It trades about 0.01 of its potential returns per unit of risk. METISA Metalrgica Timboense is currently generating about 0.01 per unit of risk. If you would invest 1,171 in Iochpe Maxion SA on August 28, 2024 and sell it today you would earn a total of 30.00 from holding Iochpe Maxion SA or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iochpe Maxion SA vs. METISA Metalrgica Timboense
Performance |
| Timeline |
| Iochpe Maxion SA |
| METISA Metalrgica |
Iochpe Maxion and METISA Metalrgica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iochpe Maxion and METISA Metalrgica
The main advantage of trading using opposite Iochpe Maxion and METISA Metalrgica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iochpe Maxion position performs unexpectedly, METISA Metalrgica 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 METISA Metalrgica will offset losses from the drop in METISA Metalrgica's long position.| Iochpe Maxion vs. Tupy SA | Iochpe Maxion vs. MAHLE Metal Leve | Iochpe Maxion vs. Randon SA Implementos | Iochpe Maxion vs. Marcopolo SA |
| METISA Metalrgica vs. Fras le SA | METISA Metalrgica vs. Indstrias Romi SA | METISA Metalrgica vs. Clave Indices De | METISA Metalrgica vs. BTG Pactual Logstica |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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