Correlation Between United States and Ledesma SAAI
Can any of the company-specific risk be diversified away by investing in both United States and Ledesma SAAI 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 Ledesma SAAI 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 Ledesma SAAI, you can compare the effects of market volatilities on United States and Ledesma SAAI 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 Ledesma SAAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Ledesma SAAI.
Diversification Opportunities for United States and Ledesma SAAI
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Ledesma is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Ledesma SAAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ledesma SAAI 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 Ledesma SAAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ledesma SAAI has no effect on the direction of United States i.e., United States and Ledesma SAAI go up and down completely randomly.
Pair Corralation between United States and Ledesma SAAI
Given the investment horizon of 90 days United States Steel is expected to generate 1.19 times more return on investment than Ledesma SAAI. However, United States is 1.19 times more volatile than Ledesma SAAI. It trades about 0.23 of its potential returns per unit of risk. Ledesma SAAI is currently generating about 0.01 per unit of risk. If you would invest 1,454,998 in United States Steel on December 4, 2024 and sell it today you would earn a total of 175,002 from holding United States Steel or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Ledesma SAAI
Performance |
| Timeline |
| United States Steel |
| Ledesma SAAI |
United States and Ledesma SAAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Ledesma SAAI
The main advantage of trading using opposite United States and Ledesma SAAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Ledesma SAAI 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 Ledesma SAAI will offset losses from the drop in Ledesma SAAI's long position.| United States vs. Verizon Communications | United States vs. Transportadora de Gas | United States vs. Harmony Gold Mining | United States vs. Compania de Transporte |
| Ledesma SAAI vs. Transportadora de Gas | Ledesma SAAI vs. United States Steel | Ledesma SAAI vs. Compania de Transporte | Ledesma SAAI vs. Verizon Communications |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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