Correlation Between Gerdau SA and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Gerdau SA and Wheaton Precious 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 Wheaton Precious 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 Wheaton Precious Metals, you can compare the effects of market volatilities on Gerdau SA and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerdau SA and Wheaton Precious.
Diversification Opportunities for Gerdau SA and Wheaton Precious
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gerdau and Wheaton is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA ADR and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of Gerdau SA i.e., Gerdau SA and Wheaton Precious go up and down completely randomly.
Pair Corralation between Gerdau SA and Wheaton Precious
Considering the 90-day investment horizon Gerdau SA ADR is expected to under-perform the Wheaton Precious. In addition to that, Gerdau SA is 1.15 times more volatile than Wheaton Precious Metals. It trades about -0.01 of its total potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.06 per unit of volatility. If you would invest 3,807 in Wheaton Precious Metals on August 30, 2024 and sell it today you would earn a total of 2,367 from holding Wheaton Precious Metals or generate 62.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gerdau SA ADR vs. Wheaton Precious Metals
Performance |
| Timeline |
| Gerdau SA ADR |
| Wheaton Precious Metals |
Gerdau SA and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerdau SA and Wheaton Precious
The main advantage of trading using opposite Gerdau SA and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerdau SA position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' 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 |
| Wheaton Precious vs. Franco Nevada | Wheaton Precious vs. Osisko Gold Ro | Wheaton Precious vs. Sandstorm Gold Ltd | Wheaton Precious vs. Royal Gold |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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