Correlation Between Fras Le and METISA Metalrgica

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

By analyzing existing cross correlation between Fras le SA and METISA Metalrgica Timboense, you can compare the effects of market volatilities on Fras Le and METISA Metalrgica 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 Fras Le with a short position of METISA Metalrgica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fras Le and METISA Metalrgica.

Diversification Opportunities for Fras Le and METISA Metalrgica

-0.38

Correlation Coefficient

Fras Le  METISA Metalrgica

Very good diversification

The 3 months correlation between Fras and METISA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fras le SA and METISA Metalrgica Timboense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METISA Metalrgica and Fras Le 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 Fras le SA are associated (or correlated) with METISA Metalrgica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METISA Metalrgica has no effect on the direction of Fras Le i.e., Fras Le and METISA Metalrgica go up and down completely randomly.

Pair Corralation between Fras Le and METISA Metalrgica

Assuming the 90 days trading horizon Fras le SA is expected to under-perform the METISA Metalrgica. But the stock apears to be less risky and, when comparing its historical volatility, Fras le SA is 1.32 times less risky than METISA Metalrgica. The stock trades about -0.1 of its potential returns per unit of risk. The METISA Metalrgica Timboense is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,130  in METISA Metalrgica Timboense on April 20, 2025 and sell it today you would earn a total of  237.00  from holding METISA Metalrgica Timboense or generate 5.74% return on investment over 90 days.

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

Fras le SA  vs.  METISA Metalrgica Timboense

Fras le SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fras le 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.

METISA Metalrgica

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in METISA Metalrgica Timboense are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, METISA Metalrgica may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Fras Le and METISA Metalrgica

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

The idea behind Fras le SA and METISA Metalrgica Timboense 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.