Correlation Between Auren Energia and CSN Minerao

Can any of the company-specific risk be diversified away by investing in both Auren Energia and CSN Minerao 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 Auren Energia and CSN Minerao into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Auren Energia and CSN Minerao

-0.69

Correlation Coefficient

Auren Energia  CSN Minerao

Excellent diversification

The 3 months correlation between Auren and CSN is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Auren Energia SA and CSN Minerao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSN Minerao SA and Auren Energia 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 Auren Energia SA are associated (or correlated) with CSN Minerao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSN Minerao SA has no effect on the direction of Auren Energia i.e., Auren Energia and CSN Minerao go up and down completely randomly.

Pair Corralation between Auren Energia and CSN Minerao

Assuming the 90 days trading horizon Auren Energia SA is expected to generate 0.94 times more return on investment than CSN Minerao. However, Auren Energia SA is 1.06 times less risky than CSN Minerao. It trades about 0.11 of its potential returns per unit of risk. CSN Minerao SA is currently generating about -0.07 per unit of risk. If you would invest  800.00  in Auren Energia SA on April 21, 2025 and sell it today you would earn a total of  94.00  from holding Auren Energia SA or generate 11.75% return on investment over 90 days.

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

Auren Energia SA  vs.  CSN Minerao SA

Auren Energia SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Auren Energia SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Auren Energia may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CSN Minerao SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSN Minerao SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Auren Energia and CSN Minerao

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

The idea behind Auren Energia SA and CSN Minerao 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.