Correlation Between Companhia Siderrgica and Cyrela Brazil

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

By analyzing existing cross correlation between Companhia Siderrgica Nacional and Cyrela Brazil Realty, you can compare the effects of market volatilities on Companhia Siderrgica and Cyrela Brazil 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 Companhia Siderrgica with a short position of Cyrela Brazil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderrgica and Cyrela Brazil.

Diversification Opportunities for Companhia Siderrgica and Cyrela Brazil

-0.34

Correlation Coefficient

Companhia Siderrgica  Cyrela Brazil

Very good diversification

The 3 months correlation between Companhia and Cyrela is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderrgica Nacional and Cyrela Brazil Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyrela Brazil Realty and Companhia Siderrgica 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 Companhia Siderrgica Nacional are associated (or correlated) with Cyrela Brazil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyrela Brazil Realty has no effect on the direction of Companhia Siderrgica i.e., Companhia Siderrgica and Cyrela Brazil go up and down completely randomly.

Pair Corralation between Companhia Siderrgica and Cyrela Brazil

Assuming the 90 days trading horizon Companhia Siderrgica Nacional is expected to under-perform the Cyrela Brazil. In addition to that, Companhia Siderrgica is 1.38 times more volatile than Cyrela Brazil Realty. It trades about -0.06 of its total potential returns per unit of risk. Cyrela Brazil Realty is currently generating about 0.06 per unit of volatility. If you would invest  2,512  in Cyrela Brazil Realty on April 22, 2025 and sell it today you would earn a total of  146.00  from holding Cyrela Brazil Realty or generate 5.81% return on investment over 90 days.

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

Companhia Siderrgica Nacional  vs.  Cyrela Brazil Realty

Companhia Siderrgica

Risk-Adjusted Performance

Very Weak

Over the last 90 days Companhia Siderrgica Nacional 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.

Cyrela Brazil Realty

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cyrela Brazil Realty are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cyrela Brazil may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Companhia Siderrgica and Cyrela Brazil

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

The idea behind Companhia Siderrgica Nacional and Cyrela Brazil Realty 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.