Correlation Between Gerdau SA and Thrivent High
Can any of the company-specific risk be diversified away by investing in both Gerdau SA and Thrivent High 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 Gerdau SA and Thrivent High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gerdau SA ADR and Thrivent High Yield, you can compare the effects of market volatilities on Gerdau SA and Thrivent High 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 Gerdau SA with a short position of Thrivent High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerdau SA and Thrivent High.
Diversification Opportunities for Gerdau SA and Thrivent High
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gerdau and Thrivent is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA ADR and Thrivent High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent High Yield and Gerdau 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 Gerdau SA ADR are associated (or correlated) with Thrivent High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent High Yield has no effect on the direction of Gerdau SA i.e., Gerdau SA and Thrivent High go up and down completely randomly.
Pair Corralation between Gerdau SA and Thrivent High
Considering the 90-day investment horizon Gerdau SA ADR is expected to generate 23.41 times more return on investment than Thrivent High. However, Gerdau SA is 23.41 times more volatile than Thrivent High Yield. It trades about 0.13 of its potential returns per unit of risk. Thrivent High Yield is currently generating about 0.24 per unit of risk. If you would invest 313.00 in Gerdau SA ADR on August 24, 2024 and sell it today you would earn a total of 26.50 from holding Gerdau SA ADR or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gerdau SA ADR vs. Thrivent High Yield
Performance |
| Timeline |
| Gerdau SA ADR |
| Thrivent High Yield |
Gerdau SA and Thrivent High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerdau SA and Thrivent High
The main advantage of trading using opposite Gerdau SA and Thrivent High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerdau SA position performs unexpectedly, Thrivent High 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 Thrivent High will offset losses from the drop in Thrivent High's long position.| Gerdau SA vs. Usinas Siderurgicas de | Gerdau SA vs. Ternium SA ADR | Gerdau SA vs. ArcelorMittal SA ADR | Gerdau SA vs. POSCO Holdings |
| Thrivent High vs. Thrivent Large Cap | Thrivent High vs. HUMANA INC | Thrivent High vs. Aquagold International | Thrivent High vs. Barloworld Ltd ADR |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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