Correlation Between G2D Investments and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both G2D Investments 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 G2D Investments and Metalurgica Gerdau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G2D Investments and Metalurgica Gerdau SA, you can compare the effects of market volatilities on G2D Investments 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 G2D Investments with a short position of Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2D Investments and Metalurgica Gerdau.
Diversification Opportunities for G2D Investments and Metalurgica Gerdau
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between G2D and Metalurgica is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding G2D Investments and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau and G2D Investments 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 G2D Investments 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 G2D Investments i.e., G2D Investments and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between G2D Investments and Metalurgica Gerdau
Assuming the 90 days trading horizon G2D Investments is expected to generate 4.6 times less return on investment than Metalurgica Gerdau. But when comparing it to its historical volatility, G2D Investments is 1.37 times less risky than Metalurgica Gerdau. It trades about 0.06 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 1,000.00 in Metalurgica Gerdau SA on August 27, 2024 and sell it today you would earn a total of 96.00 from holding Metalurgica Gerdau SA or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
G2D Investments vs. Metalurgica Gerdau SA
Performance |
| Timeline |
| G2D Investments |
| Metalurgica Gerdau |
G2D Investments and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G2D Investments and Metalurgica Gerdau
The main advantage of trading using opposite G2D Investments and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2D Investments 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.| G2D Investments vs. Fras le SA | G2D Investments vs. Clave Indices De | G2D Investments vs. BTG Pactual Logstica | G2D Investments vs. Telefonaktiebolaget LM Ericsson |
| Metalurgica Gerdau vs. Gerdau SA | Metalurgica Gerdau vs. Metalurgica Gerdau SA | Metalurgica Gerdau vs. Usinas Siderrgicas de | Metalurgica Gerdau vs. Bradespar 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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