Correlation Between Companhia Siderurgica and Austin Gold

Can any of the company-specific risk be diversified away by investing in both Companhia Siderurgica and Austin Gold 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 Companhia Siderurgica and Austin Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Companhia Siderurgica Nacional and Austin Gold Corp, you can compare the effects of market volatilities on Companhia Siderurgica and Austin Gold 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 Companhia Siderurgica with a short position of Austin Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderurgica and Austin Gold.

Diversification Opportunities for Companhia Siderurgica and Austin Gold

0.64

Correlation Coefficient

Companhia Siderurgica  Austin Gold

Poor diversification

The 3 months correlation between Companhia and Austin is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderurgica Nacional and Austin Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austin Gold Corp and Companhia Siderurgica 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 Companhia Siderurgica Nacional are associated (or correlated) with Austin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austin Gold Corp has no effect on the direction of Companhia Siderurgica i.e., Companhia Siderurgica and Austin Gold go up and down completely randomly.

Pair Corralation between Companhia Siderurgica and Austin Gold

Considering the 90-day investment horizon Companhia Siderurgica Nacional is expected to generate 0.62 times more return on investment than Austin Gold. However, Companhia Siderurgica Nacional is 1.62 times less risky than Austin Gold. It trades about 0.1 of its potential returns per unit of risk. Austin Gold Corp is currently generating about 0.05 per unit of risk. If you would invest  145.00  in Companhia Siderurgica Nacional on December 29, 2024 and sell it today you would earn a total of  26.00  from holding Companhia Siderurgica Nacional or generate 17.93% return on investment over 90 days.

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

Companhia Siderurgica Nacional  vs.  Austin Gold Corp

Companhia Siderurgica

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Companhia Siderurgica Nacional are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Companhia Siderurgica exhibited solid returns over the last few months and may actually be approaching a breakup point.

Austin Gold Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Austin Gold Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Austin Gold unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Companhia Siderurgica and Austin Gold

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

The idea behind Companhia Siderurgica Nacional and Austin Gold Corp 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.