Correlation Between Gerdau SA and Ferrexpo PLC
Can any of the company-specific risk be diversified away by investing in both Gerdau SA and Ferrexpo PLC 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 Ferrexpo PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gerdau SA and Ferrexpo PLC, you can compare the effects of market volatilities on Gerdau SA and Ferrexpo PLC 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 Ferrexpo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerdau SA and Ferrexpo PLC.
Diversification Opportunities for Gerdau SA and Ferrexpo PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gerdau and Ferrexpo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo PLC 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 are associated (or correlated) with Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Gerdau SA i.e., Gerdau SA and Ferrexpo PLC go up and down completely randomly.
Pair Corralation between Gerdau SA and Ferrexpo PLC
If you would invest 55.00 in Ferrexpo PLC on August 24, 2024 and sell it today you would earn a total of 48.00 from holding Ferrexpo PLC or generate 87.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Gerdau SA vs. Ferrexpo PLC
Performance |
| Timeline |
| Gerdau SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Ferrexpo PLC |
Gerdau SA and Ferrexpo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerdau SA and Ferrexpo PLC
The main advantage of trading using opposite Gerdau SA and Ferrexpo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerdau SA position performs unexpectedly, Ferrexpo PLC 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 Ferrexpo PLC will offset losses from the drop in Ferrexpo PLC's long position.| Gerdau SA vs. Usinas Siderrgicas de | Gerdau SA vs. Metalurgica Gerdau SA | Gerdau SA vs. Gerdau SA | Gerdau SA vs. Companhia Siderrgica Nacional |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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