Correlation Between Companhia Siderurgica and IoTeX Network

Can any of the company-specific risk be diversified away by investing in both Companhia Siderurgica and IoTeX Network 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 IoTeX Network 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 IoTeX Network, you can compare the effects of market volatilities on Companhia Siderurgica and IoTeX Network 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 IoTeX Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderurgica and IoTeX Network.

Diversification Opportunities for Companhia Siderurgica and IoTeX Network

-0.62

Correlation Coefficient

Companhia Siderurgica  IoTeX Network

Excellent diversification

The 3 months correlation between Companhia and IoTeX is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderurgica Nacional and IoTeX Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IoTeX Network 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 IoTeX Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IoTeX Network has no effect on the direction of Companhia Siderurgica i.e., Companhia Siderurgica and IoTeX Network go up and down completely randomly.

Pair Corralation between Companhia Siderurgica and IoTeX Network

Considering the 90-day investment horizon Companhia Siderurgica Nacional is expected to generate 0.32 times more return on investment than IoTeX Network. However, Companhia Siderurgica Nacional is 3.09 times less risky than IoTeX Network. It trades about 0.11 of its potential returns per unit of risk. IoTeX Network is currently generating about -0.04 per unit of risk. If you would invest  144.00  in Companhia Siderurgica Nacional on December 27, 2024 and sell it today you would earn a total of  30.00  from holding Companhia Siderurgica Nacional or generate 20.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Companhia Siderurgica Nacional  vs.  IoTeX Network

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 8 (%) 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.

IoTeX Network

Risk-Adjusted Performance

Very Weak

Over the last 90 days IoTeX Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for IoTeX Network shareholders.

Pair Trading with Companhia Siderurgica and IoTeX Network

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

The idea behind Companhia Siderurgica Nacional and IoTeX Network 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.