Correlation Between METISA Metalrgica and Advanced Micro

Can any of the company-specific risk be diversified away by investing in both METISA Metalrgica and Advanced Micro 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 METISA Metalrgica and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between METISA Metalrgica Timboense and Advanced Micro Devices, you can compare the effects of market volatilities on METISA Metalrgica and Advanced Micro 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 METISA Metalrgica with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of METISA Metalrgica and Advanced Micro.

Diversification Opportunities for METISA Metalrgica and Advanced Micro

-0.87

Correlation Coefficient

METISA Metalrgica  Advanced Micro

Pay attention - limited upside

The 3 months correlation between METISA and Advanced is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and METISA Metalrgica 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 METISA Metalrgica Timboense are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of METISA Metalrgica i.e., METISA Metalrgica and Advanced Micro go up and down completely randomly.

Pair Corralation between METISA Metalrgica and Advanced Micro

Assuming the 90 days trading horizon METISA Metalrgica Timboense is expected to generate 0.56 times more return on investment than Advanced Micro. However, METISA Metalrgica Timboense is 1.78 times less risky than Advanced Micro. It trades about 0.17 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.1 per unit of risk. If you would invest  3,643  in METISA Metalrgica Timboense on December 25, 2024 and sell it today you would earn a total of  551.00  from holding METISA Metalrgica Timboense or generate 15.12% return on investment over 90 days.

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

METISA Metalrgica Timboense  vs.  Advanced Micro Devices

METISA Metalrgica

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in METISA Metalrgica Timboense are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, METISA Metalrgica unveiled solid returns over the last few months and may actually be approaching a breakup point.

Advanced Micro Devices

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advanced Micro Devices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with METISA Metalrgica and Advanced Micro

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

The idea behind METISA Metalrgica Timboense and Advanced Micro Devices 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.