Correlation Between Companhia Siderurgica and Royal Gold
Can any of the company-specific risk be diversified away by investing in both Companhia Siderurgica and Royal Gold 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 Royal Gold 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 Royal Gold, you can compare the effects of market volatilities on Companhia Siderurgica and Royal Gold 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 Royal Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderurgica and Royal Gold.
Diversification Opportunities for Companhia Siderurgica and Royal Gold
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Companhia and Royal is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderurgica Nacional and Royal Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Gold 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 Royal Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Gold has no effect on the direction of Companhia Siderurgica i.e., Companhia Siderurgica and Royal Gold go up and down completely randomly.
Pair Corralation between Companhia Siderurgica and Royal Gold
Considering the 90-day investment horizon Companhia Siderurgica Nacional is expected to under-perform the Royal Gold. In addition to that, Companhia Siderurgica is 1.71 times more volatile than Royal Gold. It trades about -0.02 of its total potential returns per unit of risk. Royal Gold is currently generating about 0.03 per unit of volatility. If you would invest 12,064 in Royal Gold on November 1, 2024 and sell it today you would earn a total of 2,070 from holding Royal Gold or generate 17.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Siderurgica Nacional vs. Royal Gold
Performance |
| Timeline |
| Companhia Siderurgica |
| Royal Gold |
Companhia Siderurgica and Royal Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Siderurgica and Royal Gold
The main advantage of trading using opposite Companhia Siderurgica and Royal Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Siderurgica position performs unexpectedly, Royal Gold 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 Royal Gold will offset losses from the drop in Royal Gold'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 |
| Royal Gold vs. Wheaton Precious Metals | Royal Gold vs. Agnico Eagle Mines | Royal Gold vs. Sandstorm Gold Ltd | Royal Gold vs. Osisko Gold Ro |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |