Correlation Between Gerdau SA and Usinas Siderrgicas
Can any of the company-specific risk be diversified away by investing in both Gerdau SA and Usinas Siderrgicas 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 Usinas Siderrgicas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gerdau SA and Usinas Siderrgicas de, you can compare the effects of market volatilities on Gerdau SA and Usinas Siderrgicas 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 Usinas Siderrgicas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerdau SA and Usinas Siderrgicas.
Diversification Opportunities for Gerdau SA and Usinas Siderrgicas
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gerdau and Usinas is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA and Usinas Siderrgicas de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usinas Siderrgicas 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 Usinas Siderrgicas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usinas Siderrgicas has no effect on the direction of Gerdau SA i.e., Gerdau SA and Usinas Siderrgicas go up and down completely randomly.
Pair Corralation between Gerdau SA and Usinas Siderrgicas
Assuming the 90 days trading horizon Gerdau SA is expected to under-perform the Usinas Siderrgicas. But the preferred stock apears to be less risky and, when comparing its historical volatility, Gerdau SA is 1.67 times less risky than Usinas Siderrgicas. The preferred stock trades about -0.12 of its potential returns per unit of risk. The Usinas Siderrgicas de is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 510.00 in Usinas Siderrgicas de on November 5, 2024 and sell it today you would earn a total of 34.00 from holding Usinas Siderrgicas de or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gerdau SA vs. Usinas Siderrgicas de
Performance |
| Timeline |
| Gerdau SA |
| Usinas Siderrgicas |
Gerdau SA and Usinas Siderrgicas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerdau SA and Usinas Siderrgicas
The main advantage of trading using opposite Gerdau SA and Usinas Siderrgicas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerdau SA position performs unexpectedly, Usinas Siderrgicas 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 Usinas Siderrgicas will offset losses from the drop in Usinas Siderrgicas' 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 |
| Usinas Siderrgicas vs. Usinas Siderrgicas de | Usinas Siderrgicas vs. Companhia Siderrgica Nacional | Usinas Siderrgicas vs. Gerdau SA | Usinas Siderrgicas vs. Gerdau SA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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