Correlation Between BIONTECH and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both BIONTECH 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 BIONTECH and Metalurgica Gerdau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIONTECH SE DRN and Metalurgica Gerdau SA, you can compare the effects of market volatilities on BIONTECH 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 BIONTECH with a short position of Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIONTECH and Metalurgica Gerdau.
Diversification Opportunities for BIONTECH and Metalurgica Gerdau
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between BIONTECH and Metalurgica is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding BIONTECH SE DRN and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau and BIONTECH 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 BIONTECH SE DRN 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 BIONTECH i.e., BIONTECH and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between BIONTECH and Metalurgica Gerdau
Assuming the 90 days trading horizon BIONTECH is expected to generate 1.04 times less return on investment than Metalurgica Gerdau. In addition to that, BIONTECH is 1.54 times more volatile than Metalurgica Gerdau SA. It trades about 0.15 of its total potential returns per unit of risk. Metalurgica Gerdau SA is currently generating about 0.24 per unit of volatility. If you would invest 1,005 in Metalurgica Gerdau SA on August 31, 2024 and sell it today you would earn a total of 118.00 from holding Metalurgica Gerdau SA or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIONTECH SE DRN vs. Metalurgica Gerdau SA
Performance |
| Timeline |
| BIONTECH SE DRN |
| Metalurgica Gerdau |
BIONTECH and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIONTECH and Metalurgica Gerdau
The main advantage of trading using opposite BIONTECH and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIONTECH 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.| BIONTECH vs. Fras le SA | BIONTECH vs. Western Digital | BIONTECH vs. Energisa SA | BIONTECH vs. Clave Indices De |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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