Correlation Between AstraZeneca PLC and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC and Metalurgica Gerdau 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 AstraZeneca PLC and Metalurgica Gerdau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstraZeneca PLC and Metalurgica Gerdau SA, you can compare the effects of market volatilities on AstraZeneca PLC and Metalurgica Gerdau 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 AstraZeneca PLC with a short position of Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and Metalurgica Gerdau.
Diversification Opportunities for AstraZeneca PLC and Metalurgica Gerdau
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AstraZeneca and Metalurgica is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau and AstraZeneca PLC 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 AstraZeneca PLC are associated (or correlated) with Metalurgica Gerdau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalurgica Gerdau has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between AstraZeneca PLC and Metalurgica Gerdau
Assuming the 90 days trading horizon AstraZeneca PLC is expected to generate 0.97 times more return on investment than Metalurgica Gerdau. However, AstraZeneca PLC is 1.03 times less risky than Metalurgica Gerdau. It trades about 0.03 of its potential returns per unit of risk. Metalurgica Gerdau SA is currently generating about 0.01 per unit of risk. If you would invest 5,907 in AstraZeneca PLC on September 5, 2024 and sell it today you would earn a total of 993.00 from holding AstraZeneca PLC or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
AstraZeneca PLC vs. Metalurgica Gerdau SA
Performance |
| Timeline |
| AstraZeneca PLC |
| Metalurgica Gerdau |
AstraZeneca PLC and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstraZeneca PLC and Metalurgica Gerdau
The main advantage of trading using opposite AstraZeneca PLC and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC position performs unexpectedly, Metalurgica Gerdau 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 Metalurgica Gerdau will offset losses from the drop in Metalurgica Gerdau's long position.| AstraZeneca PLC vs. Metalurgica Gerdau SA | AstraZeneca PLC vs. Zoom Video Communications | AstraZeneca PLC vs. Ameriprise Financial | AstraZeneca PLC vs. Hospital Mater Dei |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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