Correlation Between CSN Minerao and Engie Brasil

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

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

Diversification Opportunities for CSN Minerao and Engie Brasil

-0.44

Correlation Coefficient

CSN Minerao  Engie Brasil

Very good diversification

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

Pair Corralation between CSN Minerao and Engie Brasil

Assuming the 90 days trading horizon CSN Minerao SA is expected to under-perform the Engie Brasil. But the stock apears to be less risky and, when comparing its historical volatility, CSN Minerao SA is 1.02 times less risky than Engie Brasil. The stock trades about -0.07 of its potential returns per unit of risk. The Engie Brasil Energia is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,855  in Engie Brasil Energia on April 21, 2025 and sell it today you would earn a total of  316.00  from holding Engie Brasil Energia or generate 8.2% return on investment over 90 days.

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

CSN Minerao SA  vs.  Engie Brasil Energia

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.

Engie Brasil Energia

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Engie Brasil Energia are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Engie Brasil may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CSN Minerao and Engie Brasil

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

The idea behind CSN Minerao SA and Engie Brasil Energia 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.