Correlation Between Aperam SA and Meridia Real

Can any of the company-specific risk be diversified away by investing in both Aperam SA and Meridia Real 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 Aperam SA and Meridia Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aperam SA and Meridia Real Estate, you can compare the effects of market volatilities on Aperam SA and Meridia Real 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 Aperam SA with a short position of Meridia Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aperam SA and Meridia Real.

Diversification Opportunities for Aperam SA and Meridia Real

-0.55

Correlation Coefficient

Aperam SA  Meridia Real

Excellent diversification

The 3 months correlation between Aperam and Meridia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aperam SA and Meridia Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridia Real Estate and Aperam SA 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 Aperam SA are associated (or correlated) with Meridia Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridia Real Estate has no effect on the direction of Aperam SA i.e., Aperam SA and Meridia Real go up and down completely randomly.

Pair Corralation between Aperam SA and Meridia Real

Assuming the 90 days trading horizon Aperam SA is expected to generate 13.04 times more return on investment than Meridia Real. However, Aperam SA is 13.04 times more volatile than Meridia Real Estate. It trades about 0.08 of its potential returns per unit of risk. Meridia Real Estate is currently generating about -0.13 per unit of risk. If you would invest  2,555  in Aperam SA on April 22, 2025 and sell it today you would earn a total of  231.00  from holding Aperam SA or generate 9.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aperam SA  vs.  Meridia Real Estate

Aperam SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aperam SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Aperam SA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Meridia Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Meridia Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Meridia Real is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aperam SA and Meridia Real

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

The idea behind Aperam SA and Meridia Real Estate 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.