Correlation Between Academy Sports and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both Academy Sports 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 Academy Sports and Metalurgica Gerdau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Academy Sports and and Metalurgica Gerdau SA, you can compare the effects of market volatilities on Academy Sports 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 Academy Sports with a short position of Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Metalurgica Gerdau.
Diversification Opportunities for Academy Sports and Metalurgica Gerdau
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Academy and Metalurgica is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports and and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau and Academy Sports 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 Academy Sports and 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 Academy Sports i.e., Academy Sports and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between Academy Sports and Metalurgica Gerdau
Assuming the 90 days trading horizon Academy Sports and is expected to generate 0.23 times more return on investment than Metalurgica Gerdau. However, Academy Sports and is 4.3 times less risky than Metalurgica Gerdau. It trades about -0.34 of its potential returns per unit of risk. Metalurgica Gerdau SA is currently generating about -0.1 per unit of risk. If you would invest 8,640 in Academy Sports and on November 3, 2024 and sell it today you would lose (248.00) from holding Academy Sports and or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 78.26% |
| Values | Daily Returns |
Academy Sports and vs. Metalurgica Gerdau SA
Performance |
| Timeline |
| Academy Sports |
| Metalurgica Gerdau |
Academy Sports and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Metalurgica Gerdau
The main advantage of trading using opposite Academy Sports and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports 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.| Academy Sports vs. Spotify Technology SA | Academy Sports vs. KB Financial Group | Academy Sports vs. Prudential Financial | Academy Sports vs. Deutsche Bank Aktiengesellschaft |
| Metalurgica Gerdau vs. Usinas Siderrgicas de | Metalurgica Gerdau vs. Gerdau SA | Metalurgica Gerdau vs. Companhia Siderrgica Nacional | Metalurgica Gerdau vs. Companhia Energtica de |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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