Correlation Between COMPUTERSHARE and NEXA RESOURCES

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

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

Diversification Opportunities for COMPUTERSHARE and NEXA RESOURCES

-0.4

Correlation Coefficient

COMPUTERSHARE  NEXA RESOURCES

Very good diversification

The 3 months correlation between COMPUTERSHARE and NEXA is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding COMPUTERSHARE and NEXA RESOURCES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXA RESOURCES SA and COMPUTERSHARE 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 COMPUTERSHARE are associated (or correlated) with NEXA RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXA RESOURCES SA has no effect on the direction of COMPUTERSHARE i.e., COMPUTERSHARE and NEXA RESOURCES go up and down completely randomly.

Pair Corralation between COMPUTERSHARE and NEXA RESOURCES

Assuming the 90 days trading horizon COMPUTERSHARE is expected to generate 0.65 times more return on investment than NEXA RESOURCES. However, COMPUTERSHARE is 1.55 times less risky than NEXA RESOURCES. It trades about 0.05 of its potential returns per unit of risk. NEXA RESOURCES SA is currently generating about -0.12 per unit of risk. If you would invest  2,120  in COMPUTERSHARE on April 17, 2025 and sell it today you would earn a total of  100.00  from holding COMPUTERSHARE or generate 4.72% return on investment over 90 days.

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

COMPUTERSHARE  vs.  NEXA RESOURCES SA

COMPUTERSHARE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUTERSHARE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, COMPUTERSHARE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

NEXA RESOURCES SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEXA RESOURCES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with COMPUTERSHARE and NEXA RESOURCES

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

The idea behind COMPUTERSHARE and NEXA RESOURCES 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.