Correlation Between Usinas Siderrgicas and Centrais Eltricas
Can any of the company-specific risk be diversified away by investing in both Usinas Siderrgicas and Centrais Eltricas 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 Usinas Siderrgicas and Centrais Eltricas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usinas Siderrgicas de and Centrais Eltricas de, you can compare the effects of market volatilities on Usinas Siderrgicas and Centrais Eltricas 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 Usinas Siderrgicas with a short position of Centrais Eltricas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usinas Siderrgicas and Centrais Eltricas.
Diversification Opportunities for Usinas Siderrgicas and Centrais Eltricas
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Usinas and Centrais is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Usinas Siderrgicas de and Centrais Eltricas de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrais Eltricas and Usinas Siderrgicas 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 Usinas Siderrgicas de are associated (or correlated) with Centrais Eltricas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrais Eltricas has no effect on the direction of Usinas Siderrgicas i.e., Usinas Siderrgicas and Centrais Eltricas go up and down completely randomly.
Pair Corralation between Usinas Siderrgicas and Centrais Eltricas
Assuming the 90 days trading horizon Usinas Siderrgicas de is expected to under-perform the Centrais Eltricas. In addition to that, Usinas Siderrgicas is 2.05 times more volatile than Centrais Eltricas de. It trades about -0.02 of its total potential returns per unit of risk. Centrais Eltricas de is currently generating about -0.01 per unit of volatility. If you would invest 8,262 in Centrais Eltricas de on September 5, 2024 and sell it today you would lose (65.00) from holding Centrais Eltricas de or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Usinas Siderrgicas de vs. Centrais Eltricas de
Performance |
| Timeline |
| Usinas Siderrgicas |
| Centrais Eltricas |
Usinas Siderrgicas and Centrais Eltricas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usinas Siderrgicas and Centrais Eltricas
The main advantage of trading using opposite Usinas Siderrgicas and Centrais Eltricas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usinas Siderrgicas position performs unexpectedly, Centrais Eltricas 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 Centrais Eltricas will offset losses from the drop in Centrais Eltricas' long position.| Usinas Siderrgicas vs. Companhia Siderrgica Nacional | Usinas Siderrgicas vs. Gerdau SA | Usinas Siderrgicas vs. Metalurgica Gerdau SA | Usinas Siderrgicas vs. Companhia Energtica de |
| Centrais Eltricas vs. Usinas Siderrgicas de | Centrais Eltricas vs. Companhia Siderrgica Nacional | Centrais Eltricas vs. Gerdau SA |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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