Correlation Between Companhia Siderurgica and Klöckner
Can any of the company-specific risk be diversified away by investing in both Companhia Siderurgica and Klöckner 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 Klöckner 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 Klckner Co SE, you can compare the effects of market volatilities on Companhia Siderurgica and Klöckner 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 Klöckner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderurgica and Klöckner.
Diversification Opportunities for Companhia Siderurgica and Klöckner
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Companhia and Klöckner is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderurgica Nacional and Klckner Co SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klckner Co SE 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 Klöckner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klckner Co SE has no effect on the direction of Companhia Siderurgica i.e., Companhia Siderurgica and Klöckner go up and down completely randomly.
Pair Corralation between Companhia Siderurgica and Klöckner
Considering the 90-day investment horizon Companhia Siderurgica Nacional is expected to under-perform the Klöckner. In addition to that, Companhia Siderurgica is 2.19 times more volatile than Klckner Co SE. It trades about -0.15 of its total potential returns per unit of risk. Klckner Co SE is currently generating about -0.04 per unit of volatility. If you would invest 547.00 in Klckner Co SE on August 29, 2024 and sell it today you would lose (12.00) from holding Klckner Co SE or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Companhia Siderurgica Nacional vs. Klckner Co SE
Performance |
| Timeline |
| Companhia Siderurgica |
| Klckner Co SE |
Companhia Siderurgica and Klöckner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Siderurgica and Klöckner
The main advantage of trading using opposite Companhia Siderurgica and Klöckner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Siderurgica position performs unexpectedly, Klöckner 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 Klöckner will offset losses from the drop in Klöckner'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 |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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