Correlation Between Outokumpu Oyj and Usinas Siderurgicas
Can any of the company-specific risk be diversified away by investing in both Outokumpu Oyj and Usinas Siderurgicas 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 Outokumpu Oyj and Usinas Siderurgicas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outokumpu Oyj ADR and Usinas Siderurgicas de, you can compare the effects of market volatilities on Outokumpu Oyj and Usinas Siderurgicas 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 Outokumpu Oyj with a short position of Usinas Siderurgicas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outokumpu Oyj and Usinas Siderurgicas.
Diversification Opportunities for Outokumpu Oyj and Usinas Siderurgicas
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Outokumpu and Usinas is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Outokumpu Oyj ADR and Usinas Siderurgicas de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usinas Siderurgicas and Outokumpu Oyj 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 Outokumpu Oyj ADR are associated (or correlated) with Usinas Siderurgicas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usinas Siderurgicas has no effect on the direction of Outokumpu Oyj i.e., Outokumpu Oyj and Usinas Siderurgicas go up and down completely randomly.
Pair Corralation between Outokumpu Oyj and Usinas Siderurgicas
Assuming the 90 days horizon Outokumpu Oyj ADR is expected to under-perform the Usinas Siderurgicas. But the pink sheet apears to be less risky and, when comparing its historical volatility, Outokumpu Oyj ADR is 3.33 times less risky than Usinas Siderurgicas. The pink sheet trades about -0.24 of its potential returns per unit of risk. The Usinas Siderurgicas de is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 113.00 in Usinas Siderurgicas de on August 24, 2024 and sell it today you would lose (5.00) from holding Usinas Siderurgicas de or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outokumpu Oyj ADR vs. Usinas Siderurgicas de
Performance |
| Timeline |
| Outokumpu Oyj ADR |
| Usinas Siderurgicas |
Outokumpu Oyj and Usinas Siderurgicas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outokumpu Oyj and Usinas Siderurgicas
The main advantage of trading using opposite Outokumpu Oyj and Usinas Siderurgicas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outokumpu Oyj position performs unexpectedly, Usinas Siderurgicas 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 Siderurgicas will offset losses from the drop in Usinas Siderurgicas' long position.| Outokumpu Oyj vs. Olympic Steel | Outokumpu Oyj vs. Mesabi Trust | Outokumpu Oyj vs. Universal Stainless Alloy | Outokumpu Oyj vs. POSCO Holdings |
| Usinas Siderurgicas vs. Olympic Steel | Usinas Siderurgicas vs. Mesabi Trust | Usinas Siderurgicas vs. Universal Stainless Alloy | Usinas Siderurgicas vs. POSCO Holdings |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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