Correlation Between Gerdau SA and Pettenati
Can any of the company-specific risk be diversified away by investing in both Gerdau SA and Pettenati 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 Pettenati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gerdau SA and Pettenati SA Industria, you can compare the effects of market volatilities on Gerdau SA and Pettenati 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 Pettenati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerdau SA and Pettenati.
Diversification Opportunities for Gerdau SA and Pettenati
Modest diversification
The 3 months correlation between Gerdau and Pettenati is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA and Pettenati SA Industria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pettenati SA Industria 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 Pettenati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pettenati SA Industria has no effect on the direction of Gerdau SA i.e., Gerdau SA and Pettenati go up and down completely randomly.
Pair Corralation between Gerdau SA and Pettenati
Assuming the 90 days trading horizon Gerdau SA is expected to generate 0.86 times more return on investment than Pettenati. However, Gerdau SA is 1.16 times less risky than Pettenati. It trades about -0.05 of its potential returns per unit of risk. Pettenati SA Industria is currently generating about -0.06 per unit of risk. If you would invest 1,806 in Gerdau SA on October 15, 2024 and sell it today you would lose (126.00) from holding Gerdau SA or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gerdau SA vs. Pettenati SA Industria
Performance |
| Timeline |
| Gerdau SA |
| Pettenati SA Industria |
Gerdau SA and Pettenati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerdau SA and Pettenati
The main advantage of trading using opposite Gerdau SA and Pettenati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerdau SA position performs unexpectedly, Pettenati 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 Pettenati will offset losses from the drop in Pettenati'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 |
| Pettenati vs. Schulz SA | Pettenati vs. Springs Global Participaes | Pettenati vs. Grazziotin SA | Pettenati vs. Companhia de Tecidos |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |