Correlation Between Companhia Siderurgica and Synalloy
Can any of the company-specific risk be diversified away by investing in both Companhia Siderurgica and Synalloy 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 Companhia Siderurgica and Synalloy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Siderurgica Nacional and Synalloy, you can compare the effects of market volatilities on Companhia Siderurgica and Synalloy 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 Companhia Siderurgica with a short position of Synalloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderurgica and Synalloy.
Diversification Opportunities for Companhia Siderurgica and Synalloy
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Companhia and Synalloy is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderurgica Nacional and Synalloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synalloy and Companhia Siderurgica 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 Companhia Siderurgica Nacional are associated (or correlated) with Synalloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synalloy has no effect on the direction of Companhia Siderurgica i.e., Companhia Siderurgica and Synalloy go up and down completely randomly.
Pair Corralation between Companhia Siderurgica and Synalloy
Considering the 90-day investment horizon Companhia Siderurgica Nacional is expected to under-perform the Synalloy. In addition to that, Companhia Siderurgica is 1.25 times more volatile than Synalloy. It trades about -0.08 of its total potential returns per unit of risk. Synalloy is currently generating about 0.02 per unit of volatility. If you would invest 1,053 in Synalloy on November 9, 2024 and sell it today you would earn a total of 62.00 from holding Synalloy or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Siderurgica Nacional vs. Synalloy
Performance |
| Timeline |
| Companhia Siderurgica |
| Synalloy |
Companhia Siderurgica and Synalloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Siderurgica and Synalloy
The main advantage of trading using opposite Companhia Siderurgica and Synalloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Siderurgica position performs unexpectedly, Synalloy 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 Synalloy will offset losses from the drop in Synalloy's long position.| Companhia Siderurgica vs. Ternium SA ADR | Companhia Siderurgica vs. ArcelorMittal SA ADR | Companhia Siderurgica vs. Commercial Metals | Companhia Siderurgica vs. Outokumpu Oyj ADR |
| Synalloy vs. Grupo Simec SAB | Synalloy vs. Mesabi Trust | Synalloy vs. Algoma Steel Group | Synalloy vs. Aperam PK |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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