Correlation Between Usinas Siderrgicas and United States
Can any of the company-specific risk be diversified away by investing in both Usinas Siderrgicas and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on Usinas Siderrgicas and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usinas Siderrgicas and United States.
Diversification Opportunities for Usinas Siderrgicas and United States
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Usinas and United is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Usinas Siderrgicas de and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Usinas Siderrgicas i.e., Usinas Siderrgicas and United States go up and down completely randomly.
Pair Corralation between Usinas Siderrgicas and United States
Assuming the 90 days trading horizon Usinas Siderrgicas de is expected to generate 2.58 times more return on investment than United States. However, Usinas Siderrgicas is 2.58 times more volatile than United States Steel. It trades about 0.22 of its potential returns per unit of risk. United States Steel is currently generating about 0.01 per unit of risk. If you would invest 990.00 in Usinas Siderrgicas de on September 1, 2024 and sell it today you would earn a total of 384.00 from holding Usinas Siderrgicas de or generate 38.79% 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. United States Steel
Performance |
| Timeline |
| Usinas Siderrgicas |
| United States Steel |
Usinas Siderrgicas and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usinas Siderrgicas and United States
The main advantage of trading using opposite Usinas Siderrgicas and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usinas Siderrgicas position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Usinas Siderrgicas vs. ArcelorMittal SA | Usinas Siderrgicas vs. United States Steel | Usinas Siderrgicas vs. Companhia Siderrgica Nacional | Usinas Siderrgicas vs. Metalurgica Gerdau SA |
| United States vs. Companhia Paranaense de | United States vs. Fras le SA | United States vs. Energisa SA | United States vs. Clave Indices 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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