Correlation Between Metalrgica Riosulense and SSC Technologies

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

By analyzing existing cross correlation between Metalrgica Riosulense SA and SSC Technologies Holdings,, you can compare the effects of market volatilities on Metalrgica Riosulense and SSC Technologies 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 Metalrgica Riosulense with a short position of SSC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalrgica Riosulense and SSC Technologies.

Diversification Opportunities for Metalrgica Riosulense and SSC Technologies

0.54

Correlation Coefficient

Metalrgica Riosulense  SSC Technologies

Very weak diversification

The 3 months correlation between Metalrgica and SSC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Metalrgica Riosulense SA and SSC Technologies Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies Hol and Metalrgica Riosulense 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 Metalrgica Riosulense SA are associated (or correlated) with SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies Hol has no effect on the direction of Metalrgica Riosulense i.e., Metalrgica Riosulense and SSC Technologies go up and down completely randomly.

Pair Corralation between Metalrgica Riosulense and SSC Technologies

Assuming the 90 days trading horizon Metalrgica Riosulense is expected to generate 5.48 times less return on investment than SSC Technologies. In addition to that, Metalrgica Riosulense is 1.86 times more volatile than SSC Technologies Holdings,. It trades about 0.01 of its total potential returns per unit of risk. SSC Technologies Holdings, is currently generating about 0.08 per unit of volatility. If you would invest  4,347  in SSC Technologies Holdings, on October 10, 2024 and sell it today you would earn a total of  2,345  from holding SSC Technologies Holdings, or generate 53.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.99%
Values	Daily Returns

Metalrgica Riosulense SA  vs.  SSC Technologies Holdings,

Metalrgica Riosulense

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metalrgica Riosulense SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Preferred Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

SSC Technologies Hol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SSC Technologies Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SSC Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Metalrgica Riosulense and SSC Technologies

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

The idea behind Metalrgica Riosulense SA and SSC Technologies Holdings, 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.