Correlation Between United States and Lupatech
Can any of the company-specific risk be diversified away by investing in both United States and Lupatech 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 United States and Lupatech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Lupatech SA, you can compare the effects of market volatilities on United States and Lupatech 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 United States with a short position of Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Lupatech.
Diversification Opportunities for United States and Lupatech
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Lupatech is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA and United States 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 United States Steel are associated (or correlated) with Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of United States i.e., United States and Lupatech go up and down completely randomly.
Pair Corralation between United States and Lupatech
Assuming the 90 days trading horizon United States Steel is expected to generate 0.86 times more return on investment than Lupatech. However, United States Steel is 1.16 times less risky than Lupatech. It trades about 0.2 of its potential returns per unit of risk. Lupatech SA is currently generating about -0.09 per unit of risk. If you would invest 19,010 in United States Steel on September 5, 2024 and sell it today you would earn a total of 4,314 from holding United States Steel or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Lupatech SA
Performance |
| Timeline |
| United States Steel |
| Lupatech SA |
United States and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Lupatech
The main advantage of trading using opposite United States and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| United States vs. Companhia Siderrgica Nacional | United States vs. Metalurgica Gerdau SA | United States vs. Metalurgica Gerdau SA | United States vs. Usinas Siderrgicas de |
| Lupatech vs. Fundo de Investimento | Lupatech vs. Fator IFIX Fundo | Lupatech vs. Fator IFIX Fundo | Lupatech vs. Domo Fundo 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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