Correlation Between Broadcom and Metalfrio Solutions

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

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

Diversification Opportunities for Broadcom and Metalfrio Solutions

-0.74

Correlation Coefficient

Broadcom  Metalfrio Solutions

Pay attention - limited upside

The 3 months correlation between Broadcom and Metalfrio is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Broadcom and Metalfrio Solutions SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalfrio Solutions and Broadcom 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 Broadcom are associated (or correlated) with Metalfrio Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalfrio Solutions has no effect on the direction of Broadcom i.e., Broadcom and Metalfrio Solutions go up and down completely randomly.

Pair Corralation between Broadcom and Metalfrio Solutions

Assuming the 90 days trading horizon Broadcom is expected to generate 1.16 times more return on investment than Metalfrio Solutions. However, Broadcom is 1.16 times more volatile than Metalfrio Solutions SA. It trades about 0.36 of its potential returns per unit of risk. Metalfrio Solutions SA is currently generating about -0.28 per unit of risk. If you would invest  1,387  in Broadcom on April 21, 2025 and sell it today you would earn a total of  856.00  from holding Broadcom or generate 61.72% return on investment over 90 days.

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

Broadcom  vs.  Metalfrio Solutions SA

Broadcom

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Broadcom are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Broadcom sustained solid returns over the last few months and may actually be approaching a breakup point.

Metalfrio Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Metalfrio Solutions SA 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 Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Broadcom and Metalfrio Solutions

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

The idea behind Broadcom and Metalfrio Solutions 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..