Correlation Between Gerdau SA and Aeris Indstria
Can any of the company-specific risk be diversified away by investing in both Gerdau SA and Aeris Indstria 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 Aeris Indstria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gerdau SA and Aeris Indstria e, you can compare the effects of market volatilities on Gerdau SA and Aeris Indstria 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 Aeris Indstria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerdau SA and Aeris Indstria.
Diversification Opportunities for Gerdau SA and Aeris Indstria
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gerdau and Aeris is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA and Aeris Indstria e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeris Indstria e 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 Aeris Indstria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeris Indstria e has no effect on the direction of Gerdau SA i.e., Gerdau SA and Aeris Indstria go up and down completely randomly.
Pair Corralation between Gerdau SA and Aeris Indstria
Assuming the 90 days trading horizon Gerdau SA is expected to under-perform the Aeris Indstria. But the preferred stock apears to be less risky and, when comparing its historical volatility, Gerdau SA is 5.65 times less risky than Aeris Indstria. The preferred stock trades about -0.05 of its potential returns per unit of risk. The Aeris Indstria e is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 638.00 in Aeris Indstria e on October 15, 2024 and sell it today you would earn a total of 86.00 from holding Aeris Indstria e or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gerdau SA vs. Aeris Indstria e
Performance |
| Timeline |
| Gerdau SA |
| Aeris Indstria e |
Gerdau SA and Aeris Indstria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerdau SA and Aeris Indstria
The main advantage of trading using opposite Gerdau SA and Aeris Indstria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerdau SA position performs unexpectedly, Aeris Indstria 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 Aeris Indstria will offset losses from the drop in Aeris Indstria's long position.| Gerdau SA vs. Usinas Siderrgicas de | Gerdau SA vs. Companhia Siderrgica Nacional | Gerdau SA vs. Banco Bradesco SA | Gerdau SA vs. Vale SA |
| Aeris Indstria vs. Mliuz SA | Aeris Indstria vs. Neogrid Participaes SA | Aeris Indstria vs. Pet Center Comrcio | Aeris Indstria vs. Locaweb Servios de |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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