Correlation Between Ternium SA and Aris Mining
Can any of the company-specific risk be diversified away by investing in both Ternium SA and Aris Mining 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 Ternium SA and Aris Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ternium SA ADR and Aris Mining, you can compare the effects of market volatilities on Ternium SA and Aris Mining 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 Ternium SA with a short position of Aris Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ternium SA and Aris Mining.
Diversification Opportunities for Ternium SA and Aris Mining
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ternium and Aris is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ternium SA ADR and Aris Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aris Mining and Ternium SA 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 Ternium SA ADR are associated (or correlated) with Aris Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aris Mining has no effect on the direction of Ternium SA i.e., Ternium SA and Aris Mining go up and down completely randomly.
Pair Corralation between Ternium SA and Aris Mining
Allowing for the 90-day total investment horizon Ternium SA ADR is expected to under-perform the Aris Mining. But the stock apears to be less risky and, when comparing its historical volatility, Ternium SA ADR is 1.84 times less risky than Aris Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Aris Mining is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 390.00 in Aris Mining on November 3, 2024 and sell it today you would lose (17.00) from holding Aris Mining or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ternium SA ADR vs. Aris Mining
Performance |
| Timeline |
| Ternium SA ADR |
| Aris Mining |
Ternium SA and Aris Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ternium SA and Aris Mining
The main advantage of trading using opposite Ternium SA and Aris Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ternium SA position performs unexpectedly, Aris Mining 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 Aris Mining will offset losses from the drop in Aris Mining's long position.| Ternium SA vs. POSCO Holdings | Ternium SA vs. Steel Dynamics | Ternium SA vs. Gerdau SA ADR | Ternium SA vs. Nucor Corp |
| Aris Mining vs. Senmiao Technology | Aris Mining vs. Dine Brands Global | Aris Mining vs. Wingstop | Aris Mining vs. BJs Restaurants |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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