Correlation Between METISA Metalrgica and Schulz SA

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both METISA Metalrgica and Schulz SA 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 METISA Metalrgica and Schulz SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METISA Metalrgica Timboense and Schulz SA, you can compare the effects of market volatilities on METISA Metalrgica and Schulz SA 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 METISA Metalrgica with a short position of Schulz SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of METISA Metalrgica and Schulz SA.

Diversification Opportunities for METISA Metalrgica and Schulz SA

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between METISA and Schulz is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding METISA Metalrgica Timboense and Schulz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schulz SA and METISA Metalrgica 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 METISA Metalrgica Timboense are associated (or correlated) with Schulz SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schulz SA has no effect on the direction of METISA Metalrgica i.e., METISA Metalrgica and Schulz SA go up and down completely randomly.

Pair Corralation between METISA Metalrgica and Schulz SA

Assuming the 90 days trading horizon METISA Metalrgica Timboense is expected to generate 0.85 times more return on investment than Schulz SA. However, METISA Metalrgica Timboense is 1.17 times less risky than Schulz SA. It trades about 0.06 of its potential returns per unit of risk. Schulz SA is currently generating about -0.28 per unit of risk. If you would invest  4,741  in METISA Metalrgica Timboense on February 5, 2024 and sell it today you would earn a total of  84.00  from holding METISA Metalrgica Timboense or generate 1.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

METISA Metalrgica Timboense  vs.  Schulz SA

 Performance 
       Timeline  
METISA Metalrgica 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days METISA Metalrgica Timboense has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, METISA Metalrgica is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Schulz SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Schulz SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Schulz SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

METISA Metalrgica and Schulz SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with METISA Metalrgica and Schulz SA

The main advantage of trading using opposite METISA Metalrgica and Schulz SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METISA Metalrgica position performs unexpectedly, Schulz SA 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 Schulz SA will offset losses from the drop in Schulz SA's long position.
The idea behind METISA Metalrgica Timboense and Schulz 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Global Correlations
Find global opportunities by holding instruments from different markets
Transaction History
View history of all your transactions and understand their impact on performance
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Stocks Directory
Find actively traded stocks across global markets