Correlation Between Usinas Siderrgicas and Banco Pine

Can any of the company-specific risk be diversified away by investing in both Usinas Siderrgicas and Banco Pine 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 Usinas Siderrgicas and Banco Pine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Usinas Siderrgicas de and Banco Pine SA, you can compare the effects of market volatilities on Usinas Siderrgicas and Banco Pine 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 Usinas Siderrgicas with a short position of Banco Pine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usinas Siderrgicas and Banco Pine.

Diversification Opportunities for Usinas Siderrgicas and Banco Pine

-0.44

Correlation Coefficient

Usinas Siderrgicas  Banco Pine

Very good diversification

The 3 months correlation between Usinas and Banco is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Usinas Siderrgicas de and Banco Pine SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Pine SA and Usinas Siderrgicas 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 Usinas Siderrgicas de are associated (or correlated) with Banco Pine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Pine SA has no effect on the direction of Usinas Siderrgicas i.e., Usinas Siderrgicas and Banco Pine go up and down completely randomly.

Pair Corralation between Usinas Siderrgicas and Banco Pine

Assuming the 90 days trading horizon Usinas Siderrgicas de is expected to under-perform the Banco Pine. In addition to that, Usinas Siderrgicas is 1.5 times more volatile than Banco Pine SA. It trades about -0.13 of its total potential returns per unit of risk. Banco Pine SA is currently generating about 0.12 per unit of volatility. If you would invest  396.00  in Banco Pine SA on December 22, 2024 and sell it today you would earn a total of  47.00  from holding Banco Pine SA or generate 11.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Usinas Siderrgicas de  vs.  Banco Pine SA

Usinas Siderrgicas

Risk-Adjusted Performance

Very Weak

Over the last 90 days Usinas Siderrgicas de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Banco Pine SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Pine SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Banco Pine unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Usinas Siderrgicas and Banco Pine

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

The idea behind Usinas Siderrgicas de and Banco Pine SA 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.