Correlation Between Aeris Indstria and Gerdau SA
Can any of the company-specific risk be diversified away by investing in both Aeris Indstria and Gerdau SA 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 Aeris Indstria and Gerdau SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeris Indstria e and Gerdau SA, you can compare the effects of market volatilities on Aeris Indstria and Gerdau SA 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 Aeris Indstria with a short position of Gerdau SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeris Indstria and Gerdau SA.
Diversification Opportunities for Aeris Indstria and Gerdau SA
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aeris and Gerdau is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Indstria e and Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerdau SA and Aeris Indstria 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 Aeris Indstria e are associated (or correlated) with Gerdau SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gerdau SA has no effect on the direction of Aeris Indstria i.e., Aeris Indstria and Gerdau SA go up and down completely randomly.
Pair Corralation between Aeris Indstria and Gerdau SA
Assuming the 90 days trading horizon Aeris Indstria e is expected to generate 9.66 times more return on investment than Gerdau SA. However, Aeris Indstria is 9.66 times more volatile than Gerdau SA. It trades about 0.2 of its potential returns per unit of risk. Gerdau SA is currently generating about -0.21 per unit of risk. If you would invest 535.00 in Aeris Indstria e on September 28, 2024 and sell it today you would earn a total of 297.00 from holding Aeris Indstria e or generate 55.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeris Indstria e vs. Gerdau SA
Performance |
| Timeline |
| Aeris Indstria e |
| Gerdau SA |
Aeris Indstria and Gerdau SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeris Indstria and Gerdau SA
The main advantage of trading using opposite Aeris Indstria and Gerdau SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Indstria position performs unexpectedly, Gerdau SA 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 Gerdau SA will offset losses from the drop in Gerdau SA's long position.| Aeris Indstria vs. Mliuz SA | Aeris Indstria vs. Neogrid Participaes SA | Aeris Indstria vs. Pet Center Comrcio | Aeris Indstria vs. Locaweb Servios de |
| Gerdau SA vs. Companhia Siderrgica Nacional | Gerdau SA vs. Banco Bradesco SA | Gerdau SA vs. Vale SA | Gerdau SA vs. Petrleo Brasileiro SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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