Correlation Between Bradespar and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both Bradespar 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 Bradespar and Metalurgica Gerdau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bradespar SA and Metalurgica Gerdau SA, you can compare the effects of market volatilities on Bradespar 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 Bradespar with a short position of Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bradespar and Metalurgica Gerdau.
Diversification Opportunities for Bradespar and Metalurgica Gerdau
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bradespar and Metalurgica is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bradespar SA and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau and Bradespar 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 Bradespar SA 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 Bradespar i.e., Bradespar and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between Bradespar and Metalurgica Gerdau
Assuming the 90 days trading horizon Bradespar is expected to generate 124.93 times less return on investment than Metalurgica Gerdau. But when comparing it to its historical volatility, Bradespar SA is 1.75 times less risky than Metalurgica Gerdau. It trades about 0.0 of its potential returns per unit of risk. Metalurgica Gerdau SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Metalurgica Gerdau SA on August 24, 2024 and sell it today you would earn a total of 98.00 from holding Metalurgica Gerdau SA or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bradespar SA vs. Metalurgica Gerdau SA
Performance |
| Timeline |
| Bradespar SA |
| Metalurgica Gerdau |
Bradespar and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bradespar and Metalurgica Gerdau
The main advantage of trading using opposite Bradespar and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bradespar 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.| Bradespar vs. Bradespar SA | Bradespar vs. Metalurgica Gerdau SA | Bradespar vs. Banco Bradesco SA | Bradespar vs. Companhia Paranaense de |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Commodity Directory Find actively traded commodities issued by global exchanges |