Correlation Between Ternium SA and Boldt SA

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Can any of the company-specific risk be diversified away by investing in both Ternium SA and Boldt SA 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 Boldt SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ternium SA DRC and Boldt SA, you can compare the effects of market volatilities on Ternium SA and Boldt SA 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 Boldt SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ternium SA and Boldt SA.

Diversification Opportunities for Ternium SA and Boldt SA

TerniumBoldtDiversified AwayTerniumBoldtDiversified Away100%
-0.62
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Ternium and Boldt is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ternium SA DRC and Boldt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boldt SA 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 DRC are associated (or correlated) with Boldt SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boldt SA has no effect on the direction of Ternium SA i.e., Ternium SA and Boldt SA go up and down completely randomly.

Pair Corralation between Ternium SA and Boldt SA

Assuming the 90 days trading horizon Ternium SA is expected to generate 6.02 times less return on investment than Boldt SA. But when comparing it to its historical volatility, Ternium SA DRC is 1.59 times less risky than Boldt SA. It trades about 0.03 of its potential returns per unit of risk. Boldt SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  677.00  in Boldt SA on November 30, 2024 and sell it today you would earn a total of  3,503  from holding Boldt SA or generate 517.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ternium SA DRC  vs.  Boldt SA

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510152025
JavaScript chart by amCharts 3.21.15TXR BOLT
       Timeline  
Ternium SA DRC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ternium SA DRC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ternium SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15JanFebFeb8,4008,6008,8009,0009,2009,4009,600
Boldt SA 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Boldt SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15JanFebFeb455055

Ternium SA and Boldt SA Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.83-2.12-1.41-0.7-0.01170.691.392.092.79 0.070.080.090.100.110.120.13
JavaScript chart by amCharts 3.21.15TXR BOLT
       Returns  

Pair Trading with Ternium SA and Boldt SA

The main advantage of trading using opposite Ternium SA and Boldt SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ternium SA position performs unexpectedly, Boldt SA 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 Boldt SA will offset losses from the drop in Boldt SA's long position.
The idea behind Ternium SA DRC and Boldt SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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