Correlation Between Usinas Siderrgicas and Eucatex SA
Can any of the company-specific risk be diversified away by investing in both Usinas Siderrgicas and Eucatex 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 Usinas Siderrgicas and Eucatex SA 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 Eucatex SA Indstria, you can compare the effects of market volatilities on Usinas Siderrgicas and Eucatex 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 Usinas Siderrgicas with a short position of Eucatex SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usinas Siderrgicas and Eucatex SA.
Diversification Opportunities for Usinas Siderrgicas and Eucatex SA
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Usinas and Eucatex is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Usinas Siderrgicas de and Eucatex SA Indstria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eucatex SA Indstria 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 Eucatex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eucatex SA Indstria has no effect on the direction of Usinas Siderrgicas i.e., Usinas Siderrgicas and Eucatex SA go up and down completely randomly.
Pair Corralation between Usinas Siderrgicas and Eucatex SA
Assuming the 90 days trading horizon Usinas Siderrgicas de is expected to under-perform the Eucatex SA. But the preferred stock apears to be less risky and, when comparing its historical volatility, Usinas Siderrgicas de is 1.08 times less risky than Eucatex SA. The preferred stock trades about -0.55 of its potential returns per unit of risk. The Eucatex SA Indstria is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,359 in Eucatex SA Indstria on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Eucatex SA Indstria or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Usinas Siderrgicas de vs. Eucatex SA Indstria
Performance |
| Timeline |
| Usinas Siderrgicas |
| Eucatex SA Indstria |
Usinas Siderrgicas and Eucatex SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usinas Siderrgicas and Eucatex SA
The main advantage of trading using opposite Usinas Siderrgicas and Eucatex SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usinas Siderrgicas position performs unexpectedly, Eucatex 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 Eucatex SA will offset losses from the drop in Eucatex SA's 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 |
| Eucatex SA vs. Companhia Siderrgica Nacional | Eucatex SA vs. Usinas Siderrgicas de | Eucatex SA vs. Gerdau SA | Eucatex SA vs. Companhia Energtica de |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |