Correlation Between CSN Minerao and Jalles Machado

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

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

Diversification Opportunities for CSN Minerao and Jalles Machado

0.85

Correlation Coefficient

CSN Minerao  Jalles Machado

Very poor diversification

The 3 months correlation between CSN and Jalles is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CSN Minerao SA and Jalles Machado SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jalles Machado SA and CSN Minerao 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 CSN Minerao SA are associated (or correlated) with Jalles Machado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jalles Machado SA has no effect on the direction of CSN Minerao i.e., CSN Minerao and Jalles Machado go up and down completely randomly.

Pair Corralation between CSN Minerao and Jalles Machado

Assuming the 90 days trading horizon CSN Minerao SA is expected to under-perform the Jalles Machado. In addition to that, CSN Minerao is 1.27 times more volatile than Jalles Machado SA. It trades about -0.3 of its total potential returns per unit of risk. Jalles Machado SA is currently generating about -0.2 per unit of volatility. If you would invest  486.00  in Jalles Machado SA on October 8, 2024 and sell it today you would lose (34.00) from holding Jalles Machado SA or give up 7.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

CSN Minerao SA  vs.  Jalles Machado SA

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.

Jalles Machado SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jalles Machado 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 CSN Minerao and Jalles Machado

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

The idea behind CSN Minerao SA and Jalles Machado 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.