Correlation Between Gerdau SA and Iron Road
Can any of the company-specific risk be diversified away by investing in both Gerdau SA and Iron Road 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 Iron Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gerdau SA and Iron Road Limited, you can compare the effects of market volatilities on Gerdau SA and Iron Road 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 Iron Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerdau SA and Iron Road.
Diversification Opportunities for Gerdau SA and Iron Road
Pay attention - limited upside
The 3 months correlation between Gerdau and Iron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA and Iron Road Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Road Limited 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 Iron Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Road Limited has no effect on the direction of Gerdau SA i.e., Gerdau SA and Iron Road go up and down completely randomly.
Pair Corralation between Gerdau SA and Iron Road
If you would invest 1,796 in Gerdau SA on September 3, 2024 and sell it today you would earn a total of 234.00 from holding Gerdau SA or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Gerdau SA vs. Iron Road Limited
Performance |
| Timeline |
| Gerdau SA |
| Iron Road Limited |
Gerdau SA and Iron Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerdau SA and Iron Road
The main advantage of trading using opposite Gerdau SA and Iron Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerdau SA position performs unexpectedly, Iron Road 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 Iron Road will offset losses from the drop in Iron Road'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 |
| Iron Road vs. Ta Chen Stainless | Iron Road vs. Gerdau SA | Iron Road vs. Gerdau SA | Iron Road vs. Nucor Corp |
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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