Correlation Between Usinas Siderurgicas and Mesabi Trust
Can any of the company-specific risk be diversified away by investing in both Usinas Siderurgicas and Mesabi Trust 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 Siderurgicas and Mesabi Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usinas Siderurgicas de and Mesabi Trust, you can compare the effects of market volatilities on Usinas Siderurgicas and Mesabi Trust 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 Siderurgicas with a short position of Mesabi Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usinas Siderurgicas and Mesabi Trust.
Diversification Opportunities for Usinas Siderurgicas and Mesabi Trust
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Usinas and Mesabi is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Usinas Siderurgicas de and Mesabi Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesabi Trust and Usinas Siderurgicas 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 Siderurgicas de are associated (or correlated) with Mesabi Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesabi Trust has no effect on the direction of Usinas Siderurgicas i.e., Usinas Siderurgicas and Mesabi Trust go up and down completely randomly.
Pair Corralation between Usinas Siderurgicas and Mesabi Trust
Assuming the 90 days horizon Usinas Siderurgicas de is expected to under-perform the Mesabi Trust. In addition to that, Usinas Siderurgicas is 2.19 times more volatile than Mesabi Trust. It trades about -0.11 of its total potential returns per unit of risk. Mesabi Trust is currently generating about 0.13 per unit of volatility. If you would invest 2,453 in Mesabi Trust on August 27, 2024 and sell it today you would earn a total of 125.00 from holding Mesabi Trust or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Usinas Siderurgicas de vs. Mesabi Trust
Performance |
| Timeline |
| Usinas Siderurgicas |
| Mesabi Trust |
Usinas Siderurgicas and Mesabi Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usinas Siderurgicas and Mesabi Trust
The main advantage of trading using opposite Usinas Siderurgicas and Mesabi Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usinas Siderurgicas position performs unexpectedly, Mesabi Trust 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 Mesabi Trust will offset losses from the drop in Mesabi Trust's long position.| Usinas Siderurgicas vs. Olympic Steel | Usinas Siderurgicas vs. Mesabi Trust | Usinas Siderurgicas vs. Universal Stainless Alloy | Usinas Siderurgicas vs. Outokumpu Oyj ADR |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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