Correlation Between Usinas Siderrgicas and Oi SA
Can any of the company-specific risk be diversified away by investing in both Usinas Siderrgicas and Oi 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 Oi 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 Oi SA, you can compare the effects of market volatilities on Usinas Siderrgicas and Oi 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 Oi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usinas Siderrgicas and Oi SA.
Diversification Opportunities for Usinas Siderrgicas and Oi SA
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Usinas and OIBR3 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Usinas Siderrgicas de and Oi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oi SA 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 Oi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oi SA has no effect on the direction of Usinas Siderrgicas i.e., Usinas Siderrgicas and Oi SA go up and down completely randomly.
Pair Corralation between Usinas Siderrgicas and Oi SA
Assuming the 90 days trading horizon Usinas Siderrgicas de is expected to generate 0.11 times more return on investment than Oi SA. However, Usinas Siderrgicas de is 9.09 times less risky than Oi SA. It trades about -0.15 of its potential returns per unit of risk. Oi SA is currently generating about -0.1 per unit of risk. If you would invest 657.00 in Usinas Siderrgicas de on August 31, 2024 and sell it today you would lose (51.00) from holding Usinas Siderrgicas de or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Usinas Siderrgicas de vs. Oi SA
Performance |
| Timeline |
| Usinas Siderrgicas |
| Oi SA |
Usinas Siderrgicas and Oi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usinas Siderrgicas and Oi SA
The main advantage of trading using opposite Usinas Siderrgicas and Oi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usinas Siderrgicas position performs unexpectedly, Oi 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 Oi SA will offset losses from the drop in Oi 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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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