Correlation Between Companhia Siderrgica and IShares Global

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

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

Diversification Opportunities for Companhia Siderrgica and IShares Global

0.0

Correlation Coefficient

Companhia Siderrgica  IShares Global

Pay attention - limited upside

The 3 months correlation between Companhia and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderrgica Nacional and iShares Global Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Timber and Companhia Siderrgica 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 Siderrgica Nacional are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Timber has no effect on the direction of Companhia Siderrgica i.e., Companhia Siderrgica and IShares Global go up and down completely randomly.

Pair Corralation between Companhia Siderrgica and IShares Global

If you would invest  3,756  in Companhia Siderrgica Nacional on September 13, 2024 and sell it today you would lose (56.00) from holding Companhia Siderrgica Nacional or give up 1.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Companhia Siderrgica Nacional  vs.  iShares Global Timber

Companhia Siderrgica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Companhia Siderrgica Nacional has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Companhia Siderrgica is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

iShares Global Timber

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Global Timber has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, IShares Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Companhia Siderrgica and IShares Global

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

The idea behind Companhia Siderrgica Nacional and iShares Global Timber 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.