Correlation Between Companhia Siderrgica and PDG Realty

Can any of the company-specific risk be diversified away by investing in both Companhia Siderrgica and PDG Realty 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 PDG Realty 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 PDG Realty SA, you can compare the effects of market volatilities on Companhia Siderrgica and PDG Realty 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 PDG Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Siderrgica and PDG Realty.

Diversification Opportunities for Companhia Siderrgica and PDG Realty

0.8

Correlation Coefficient

Companhia Siderrgica  PDG Realty

Very poor diversification

The 3 months correlation between Companhia and PDG is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Siderrgica Nacional and PDG Realty SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDG Realty SA 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 PDG Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDG Realty SA has no effect on the direction of Companhia Siderrgica i.e., Companhia Siderrgica and PDG Realty go up and down completely randomly.

Pair Corralation between Companhia Siderrgica and PDG Realty

Assuming the 90 days trading horizon Companhia Siderrgica Nacional is expected to generate 0.21 times more return on investment than PDG Realty. However, Companhia Siderrgica Nacional is 4.7 times less risky than PDG Realty. It trades about 0.02 of its potential returns per unit of risk. PDG Realty SA is currently generating about -0.04 per unit of risk. If you would invest  786.00  in Companhia Siderrgica Nacional on April 23, 2025 and sell it today you would earn a total of  13.00  from holding Companhia Siderrgica Nacional or generate 1.65% return on investment over 90 days.

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

Companhia Siderrgica Nacional  vs.  PDG Realty SA

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 weak 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.

PDG Realty SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days PDG Realty SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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 Companhia Siderrgica and PDG Realty

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

The idea behind Companhia Siderrgica Nacional and PDG Realty 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 Transaction History module to view history of all your transactions and understand their impact on performance.