Correlation Between CCR SA and Gerdau SA
Can any of the company-specific risk be diversified away by investing in both CCR SA 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 CCR SA and Gerdau SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCR SA and Gerdau SA, you can compare the effects of market volatilities on CCR SA 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 CCR SA with a short position of Gerdau SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCR SA and Gerdau SA.
Diversification Opportunities for CCR SA and Gerdau SA
Very good diversification
The 3 months correlation between CCR and Gerdau is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CCR SA and Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerdau SA and CCR SA 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 CCR SA 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 CCR SA i.e., CCR SA and Gerdau SA go up and down completely randomly.
Pair Corralation between CCR SA and Gerdau SA
Assuming the 90 days trading horizon CCR SA is expected to generate 0.86 times more return on investment than Gerdau SA. However, CCR SA is 1.16 times less risky than Gerdau SA. It trades about 0.02 of its potential returns per unit of risk. Gerdau SA is currently generating about 0.0 per unit of risk. If you would invest 1,049 in CCR SA on August 24, 2024 and sell it today you would earn a total of 135.00 from holding CCR SA or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
CCR SA vs. Gerdau SA
Performance |
| Timeline |
| CCR SA |
| Gerdau SA |
CCR SA and Gerdau SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCR SA and Gerdau SA
The main advantage of trading using opposite CCR SA and Gerdau SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCR SA 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.| CCR SA vs. METISA Metalrgica Timboense | CCR SA vs. Lupatech SA | CCR SA vs. Recrusul SA | CCR SA vs. Fras le SA |
| Gerdau SA vs. Metalurgica Gerdau SA | Gerdau SA vs. Companhia Siderrgica Nacional | Gerdau SA vs. Companhia Energtica de | Gerdau SA vs. Companhia Paranaense 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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