Correlation Between Ternium SA and Menora Miv
Can any of the company-specific risk be diversified away by investing in both Ternium SA and Menora Miv 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 Ternium SA and Menora Miv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ternium SA ADR and Menora Miv Hld, you can compare the effects of market volatilities on Ternium SA and Menora Miv 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 Ternium SA with a short position of Menora Miv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ternium SA and Menora Miv.
Diversification Opportunities for Ternium SA and Menora Miv
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ternium and Menora is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ternium SA ADR and Menora Miv Hld in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menora Miv Hld and Ternium SA 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 Ternium SA ADR are associated (or correlated) with Menora Miv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menora Miv Hld has no effect on the direction of Ternium SA i.e., Ternium SA and Menora Miv go up and down completely randomly.
Pair Corralation between Ternium SA and Menora Miv
Allowing for the 90-day total investment horizon Ternium SA ADR is expected to generate 0.83 times more return on investment than Menora Miv. However, Ternium SA ADR is 1.2 times less risky than Menora Miv. It trades about 0.09 of its potential returns per unit of risk. Menora Miv Hld is currently generating about -0.28 per unit of risk. If you would invest 4,103 in Ternium SA ADR on January 25, 2024 and sell it today you would earn a total of 107.00 from holding Ternium SA ADR or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Ternium SA ADR vs. Menora Miv Hld
Performance |
| Timeline |
| Ternium SA ADR |
| Menora Miv Hld |
Ternium SA and Menora Miv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ternium SA and Menora Miv
The main advantage of trading using opposite Ternium SA and Menora Miv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ternium SA position performs unexpectedly, Menora Miv 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 Menora Miv will offset losses from the drop in Menora Miv's long position.| Ternium SA vs. POSCO Holdings | Ternium SA vs. Steel Dynamics | Ternium SA vs. Gerdau SA ADR | Ternium SA vs. Nucor Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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