Correlation Between Cia Brasileira and CSN Minerao

Can any of the company-specific risk be diversified away by investing in both Cia Brasileira and CSN Minerao 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 Cia Brasileira and CSN Minerao into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cia Brasileira de and CSN Minerao SA, you can compare the effects of market volatilities on Cia Brasileira and CSN Minerao 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 Cia Brasileira with a short position of CSN Minerao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cia Brasileira and CSN Minerao.

Diversification Opportunities for Cia Brasileira and CSN Minerao

0.0

Correlation Coefficient

Cia Brasileira  CSN Minerao

Pay attention - limited upside

The 3 months correlation between Cia and CSN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cia Brasileira de and CSN Minerao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSN Minerao SA and Cia Brasileira 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 Cia Brasileira de are associated (or correlated) with CSN Minerao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSN Minerao SA has no effect on the direction of Cia Brasileira i.e., Cia Brasileira and CSN Minerao go up and down completely randomly.

Pair Corralation between Cia Brasileira and CSN Minerao

If you would invest  513.00  in CSN Minerao SA on October 22, 2024 and sell it today you would lose (1.00) from holding CSN Minerao SA or give up 0.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.88%
Values	Daily Returns

Cia Brasileira de  vs.  CSN Minerao SA

Cia Brasileira de

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Cia Brasileira de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cia Brasileira is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CSN Minerao SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSN Minerao SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cia Brasileira and CSN Minerao

The main advantage of trading using opposite Cia Brasileira and CSN Minerao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cia Brasileira position performs unexpectedly, CSN Minerao 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 CSN Minerao will offset losses from the drop in CSN Minerao's long position.

The idea behind Cia Brasileira de and CSN Minerao SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.