Correlation Between Gerdau SA and Voestalpine
Can any of the company-specific risk be diversified away by investing in both Gerdau SA and Voestalpine 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 Voestalpine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gerdau SA and Voestalpine AG PK, you can compare the effects of market volatilities on Gerdau SA and Voestalpine 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 Voestalpine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerdau SA and Voestalpine.
Diversification Opportunities for Gerdau SA and Voestalpine
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gerdau and Voestalpine is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA and Voestalpine AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voestalpine AG PK 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 Voestalpine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voestalpine AG PK has no effect on the direction of Gerdau SA i.e., Gerdau SA and Voestalpine go up and down completely randomly.
Pair Corralation between Gerdau SA and Voestalpine
Assuming the 90 days trading horizon Gerdau SA is expected to generate 0.84 times more return on investment than Voestalpine. However, Gerdau SA is 1.19 times less risky than Voestalpine. It trades about 0.02 of its potential returns per unit of risk. Voestalpine AG PK is currently generating about 0.0 per unit of risk. If you would invest 1,703 in Gerdau SA on September 19, 2024 and sell it today you would earn a total of 140.00 from holding Gerdau SA or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Gerdau SA vs. Voestalpine AG PK
Performance |
| Timeline |
| Gerdau SA |
| Voestalpine AG PK |
Gerdau SA and Voestalpine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerdau SA and Voestalpine
The main advantage of trading using opposite Gerdau SA and Voestalpine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerdau SA position performs unexpectedly, Voestalpine 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 Voestalpine will offset losses from the drop in Voestalpine's long position.| Gerdau SA vs. Companhia Siderrgica Nacional | Gerdau SA vs. Metalurgica Gerdau SA | Gerdau SA vs. Metalurgica Gerdau SA | Gerdau SA vs. Usinas Siderrgicas de |
| Voestalpine vs. ArcelorMittal SA ADR | Voestalpine vs. Gerdau SA ADR | Voestalpine vs. POSCO Holdings | Voestalpine vs. HUMANA INC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |