Correlation Between Iochpe Maxion and Usinas Siderrgicas
Can any of the company-specific risk be diversified away by investing in both Iochpe Maxion and Usinas Siderrgicas 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 Usinas Siderrgicas 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 Usinas Siderrgicas de, you can compare the effects of market volatilities on Iochpe Maxion and Usinas Siderrgicas 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 Usinas Siderrgicas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iochpe Maxion and Usinas Siderrgicas.
Diversification Opportunities for Iochpe Maxion and Usinas Siderrgicas
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Iochpe and Usinas is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Iochpe Maxion SA and Usinas Siderrgicas de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usinas Siderrgicas 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 Usinas Siderrgicas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usinas Siderrgicas has no effect on the direction of Iochpe Maxion i.e., Iochpe Maxion and Usinas Siderrgicas go up and down completely randomly.
Pair Corralation between Iochpe Maxion and Usinas Siderrgicas
Assuming the 90 days trading horizon Iochpe Maxion SA is expected to generate 0.86 times more return on investment than Usinas Siderrgicas. However, Iochpe Maxion SA is 1.16 times less risky than Usinas Siderrgicas. It trades about 0.03 of its potential returns per unit of risk. Usinas Siderrgicas de is currently generating about 0.01 per unit of risk. If you would invest 1,140 in Iochpe Maxion SA on August 28, 2024 and sell it today you would earn a total of 37.00 from holding Iochpe Maxion SA or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iochpe Maxion SA vs. Usinas Siderrgicas de
Performance |
| Timeline |
| Iochpe Maxion SA |
| Usinas Siderrgicas |
Iochpe Maxion and Usinas Siderrgicas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iochpe Maxion and Usinas Siderrgicas
The main advantage of trading using opposite Iochpe Maxion and Usinas Siderrgicas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iochpe Maxion position performs unexpectedly, Usinas Siderrgicas 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 Usinas Siderrgicas will offset losses from the drop in Usinas Siderrgicas' long position.| Iochpe Maxion vs. METISA Metalrgica Timboense | Iochpe Maxion vs. Lupatech SA | Iochpe Maxion vs. Recrusul SA | Iochpe Maxion vs. Fras le SA |
| Usinas Siderrgicas vs. Companhia Siderrgica Nacional | Usinas Siderrgicas vs. Gerdau SA | Usinas Siderrgicas vs. Metalurgica Gerdau SA | Usinas Siderrgicas vs. Companhia Energtica de |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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