Correlation Between Metalurgica Gerdau and BIONTECH
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and BIONTECH 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 Metalurgica Gerdau and BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metalurgica Gerdau SA and BIONTECH SE DRN, you can compare the effects of market volatilities on Metalurgica Gerdau and BIONTECH 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 Metalurgica Gerdau with a short position of BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and BIONTECH.
Diversification Opportunities for Metalurgica Gerdau and BIONTECH
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Metalurgica and BIONTECH is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN and Metalurgica Gerdau 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 Metalurgica Gerdau SA are associated (or correlated) with BIONTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIONTECH SE DRN has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and BIONTECH go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and BIONTECH
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to generate 0.65 times more return on investment than BIONTECH. However, Metalurgica Gerdau SA is 1.54 times less risky than BIONTECH. It trades about 0.24 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about 0.15 per unit of risk. If you would invest 1,005 in Metalurgica Gerdau SA on August 31, 2024 and sell it today you would earn a total of 118.00 from holding Metalurgica Gerdau SA or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. BIONTECH SE DRN
Performance |
| Timeline |
| Metalurgica Gerdau |
| BIONTECH SE DRN |
Metalurgica Gerdau and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and BIONTECH
The main advantage of trading using opposite Metalurgica Gerdau and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, BIONTECH 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 BIONTECH will offset losses from the drop in BIONTECH's long position.| Metalurgica Gerdau vs. Companhia Paranaense de | Metalurgica Gerdau vs. Fras le SA | Metalurgica Gerdau vs. Energisa SA | Metalurgica Gerdau vs. Clave Indices De |
| BIONTECH vs. Fras le SA | BIONTECH vs. Western Digital | BIONTECH vs. Energisa SA | BIONTECH vs. Clave Indices 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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