Correlation Between Neogrid Participaes and CSN Minerao
Can any of the company-specific risk be diversified away by investing in both Neogrid Participaes and CSN Minerao 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 Neogrid Participaes and CSN Minerao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neogrid Participaes SA and CSN Minerao SA, you can compare the effects of market volatilities on Neogrid Participaes and CSN Minerao 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 Neogrid Participaes with a short position of CSN Minerao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neogrid Participaes and CSN Minerao.
Diversification Opportunities for Neogrid Participaes and CSN Minerao
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neogrid and CSN is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Neogrid Participaes SA and CSN Minerao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSN Minerao SA and Neogrid Participaes 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 Neogrid Participaes SA are associated (or correlated) with CSN Minerao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSN Minerao SA has no effect on the direction of Neogrid Participaes i.e., Neogrid Participaes and CSN Minerao go up and down completely randomly.
Pair Corralation between Neogrid Participaes and CSN Minerao
Assuming the 90 days trading horizon Neogrid Participaes SA is expected to generate 1.32 times more return on investment than CSN Minerao. However, Neogrid Participaes is 1.32 times more volatile than CSN Minerao SA. It trades about 0.19 of its potential returns per unit of risk. CSN Minerao SA is currently generating about -0.41 per unit of risk. If you would invest 2,480 in Neogrid Participaes SA on September 3, 2024 and sell it today you would earn a total of 260.00 from holding Neogrid Participaes SA or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neogrid Participaes SA vs. CSN Minerao SA
Performance |
| Timeline |
| Neogrid Participaes |
| CSN Minerao SA |
Neogrid Participaes and CSN Minerao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neogrid Participaes and CSN Minerao
The main advantage of trading using opposite Neogrid Participaes and CSN Minerao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neogrid Participaes position performs unexpectedly, CSN Minerao 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 CSN Minerao will offset losses from the drop in CSN Minerao's long position.| Neogrid Participaes vs. Aeris Indstria e | Neogrid Participaes vs. Mliuz SA | Neogrid Participaes vs. Enjoei SA | Neogrid Participaes vs. Locaweb Servios 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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