Correlation Between Metalrgica Riosulense and Cigna
Can any of the company-specific risk be diversified away by investing in both Metalrgica Riosulense and Cigna 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 Metalrgica Riosulense and Cigna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metalrgica Riosulense SA and Cigna, you can compare the effects of market volatilities on Metalrgica Riosulense and Cigna 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 Metalrgica Riosulense with a short position of Cigna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalrgica Riosulense and Cigna.
Diversification Opportunities for Metalrgica Riosulense and Cigna
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metalrgica and Cigna is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Metalrgica Riosulense SA and Cigna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cigna and Metalrgica Riosulense 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 Metalrgica Riosulense SA are associated (or correlated) with Cigna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cigna has no effect on the direction of Metalrgica Riosulense i.e., Metalrgica Riosulense and Cigna go up and down completely randomly.
Pair Corralation between Metalrgica Riosulense and Cigna
Assuming the 90 days trading horizon Metalrgica Riosulense SA is expected to under-perform the Cigna. In addition to that, Metalrgica Riosulense is 1.13 times more volatile than Cigna. It trades about -0.21 of its total potential returns per unit of risk. Cigna is currently generating about -0.04 per unit of volatility. If you would invest 46,154 in Cigna on September 12, 2024 and sell it today you would lose (1,645) from holding Cigna or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalrgica Riosulense SA vs. Cigna
Performance |
| Timeline |
| Metalrgica Riosulense |
| Cigna |
Metalrgica Riosulense and Cigna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalrgica Riosulense and Cigna
The main advantage of trading using opposite Metalrgica Riosulense and Cigna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalrgica Riosulense position performs unexpectedly, Cigna 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 Cigna will offset losses from the drop in Cigna's long position.| Metalrgica Riosulense vs. METISA Metalrgica Timboense | Metalrgica Riosulense vs. Recrusul SA | Metalrgica Riosulense vs. Randon SA Implementos | Metalrgica Riosulense vs. Electro Ao Altona |
| Cigna vs. Metalurgica Gerdau SA | Cigna vs. Nordon Indstrias Metalrgicas | Cigna vs. Autohome | Cigna vs. Palantir Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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