Correlation Between United States and Usinas Siderurgicas

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

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

Diversification Opportunities for United States and Usinas Siderurgicas

0.7

Correlation Coefficient

United States  Usinas Siderurgicas

Poor diversification

The 3 months correlation between United and Usinas is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Usinas Siderurgicas de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usinas Siderurgicas and United States 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 United States Steel are associated (or correlated) with Usinas Siderurgicas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usinas Siderurgicas has no effect on the direction of United States i.e., United States and Usinas Siderurgicas go up and down completely randomly.

Pair Corralation between United States and Usinas Siderurgicas

Taking into account the 90-day investment horizon United States Steel is expected to generate 0.94 times more return on investment than Usinas Siderurgicas. However, United States Steel is 1.06 times less risky than Usinas Siderurgicas. It trades about 0.03 of its potential returns per unit of risk. Usinas Siderurgicas de is currently generating about -0.01 per unit of risk. If you would invest  2,968  in United States Steel on October 25, 2024 and sell it today you would earn a total of  679.00  from holding United States Steel or generate 22.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.39%
Values	Daily Returns

United States Steel  vs.  Usinas Siderurgicas de

United States Steel

Risk-Adjusted Performance

0 of 100

Very Weak

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

Usinas Siderurgicas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usinas Siderurgicas de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with United States and Usinas Siderurgicas

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

The idea behind United States Steel and Usinas Siderurgicas de 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..