Correlation Between Reliance Steel and Compania
Can any of the company-specific risk be diversified away by investing in both Reliance Steel and Compania 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 Reliance Steel and Compania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reliance Steel Aluminum and Compania de Minas, you can compare the effects of market volatilities on Reliance Steel and Compania 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 Reliance Steel with a short position of Compania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reliance Steel and Compania.
Diversification Opportunities for Reliance Steel and Compania
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Reliance and Compania is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Steel Aluminum and Compania de Minas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania de Minas and Reliance Steel 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 Reliance Steel Aluminum are associated (or correlated) with Compania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania de Minas has no effect on the direction of Reliance Steel i.e., Reliance Steel and Compania go up and down completely randomly.
Pair Corralation between Reliance Steel and Compania
Allowing for the 90-day total investment horizon Reliance Steel Aluminum is expected to under-perform the Compania. But the stock apears to be less risky and, when comparing its historical volatility, Reliance Steel Aluminum is 2.42 times less risky than Compania. The stock trades about -0.06 of its potential returns per unit of risk. The Compania de Minas is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,852 in Compania de Minas on August 18, 2025 and sell it today you would earn a total of 504.00 from holding Compania de Minas or generate 27.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reliance Steel Aluminum vs. Compania de Minas
Performance |
| Timeline |
| Reliance Steel Aluminum |
| Compania de Minas |
Reliance Steel and Compania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reliance Steel and Compania
The main advantage of trading using opposite Reliance Steel and Compania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliance Steel position performs unexpectedly, Compania 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 Compania will offset losses from the drop in Compania's long position.| Reliance Steel vs. RPM International | Reliance Steel vs. Cemex SAB de | Reliance Steel vs. POSCO Holdings | Reliance Steel vs. Sociedad Quimica y |
| Compania vs. Triple Flag Precious | Compania vs. New Gold | Compania vs. Ufp Industries | Compania vs. Eldorado Gold 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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