Correlation Between Ternium SA and Universal Stainless
Can any of the company-specific risk be diversified away by investing in both Ternium SA and Universal Stainless 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 Universal Stainless 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 Universal Stainless Alloy, you can compare the effects of market volatilities on Ternium SA and Universal Stainless 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 Universal Stainless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ternium SA and Universal Stainless.
Diversification Opportunities for Ternium SA and Universal Stainless
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ternium and Universal is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ternium SA ADR and Universal Stainless Alloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Stainless Alloy 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 Universal Stainless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Stainless Alloy has no effect on the direction of Ternium SA i.e., Ternium SA and Universal Stainless go up and down completely randomly.
Pair Corralation between Ternium SA and Universal Stainless
Allowing for the 90-day total investment horizon Ternium SA ADR is expected to under-perform the Universal Stainless. In addition to that, Ternium SA is 5.21 times more volatile than Universal Stainless Alloy. It trades about -0.01 of its total potential returns per unit of risk. Universal Stainless Alloy is currently generating about 0.15 per unit of volatility. If you would invest 4,365 in Universal Stainless Alloy on August 24, 2024 and sell it today you would earn a total of 58.00 from holding Universal Stainless Alloy or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ternium SA ADR vs. Universal Stainless Alloy
Performance |
| Timeline |
| Ternium SA ADR |
| Universal Stainless Alloy |
Ternium SA and Universal Stainless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ternium SA and Universal Stainless
The main advantage of trading using opposite Ternium SA and Universal Stainless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ternium SA position performs unexpectedly, Universal Stainless 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 Universal Stainless will offset losses from the drop in Universal Stainless' long position.| Ternium SA vs. POSCO Holdings | Ternium SA vs. Steel Dynamics | Ternium SA vs. Gerdau SA ADR | Ternium SA vs. Nucor Corp |
| Universal Stainless vs. Cleveland Cliffs | Universal Stainless vs. United States Steel | Universal Stainless vs. Reliance Steel Aluminum | Universal Stainless vs. Nucor Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |