Correlation Between Metalurgica Gerdau and Bradespar
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Bradespar 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 Bradespar 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 Bradespar SA, you can compare the effects of market volatilities on Metalurgica Gerdau and Bradespar 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 Bradespar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Bradespar.
Diversification Opportunities for Metalurgica Gerdau and Bradespar
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metalurgica and Bradespar is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Bradespar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bradespar SA 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 Bradespar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bradespar SA has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Bradespar go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Bradespar
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to generate 0.84 times more return on investment than Bradespar. However, Metalurgica Gerdau SA is 1.19 times less risky than Bradespar. It trades about 0.05 of its potential returns per unit of risk. Bradespar SA is currently generating about -0.03 per unit of risk. If you would invest 975.00 in Metalurgica Gerdau SA on August 28, 2024 and sell it today you would earn a total of 121.00 from holding Metalurgica Gerdau SA or generate 12.41% 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. Bradespar SA
Performance |
| Timeline |
| Metalurgica Gerdau |
| Bradespar SA |
Metalurgica Gerdau and Bradespar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Bradespar
The main advantage of trading using opposite Metalurgica Gerdau and Bradespar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Bradespar 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 Bradespar will offset losses from the drop in Bradespar's long position.| Metalurgica Gerdau vs. Companhia Siderrgica Nacional | Metalurgica Gerdau vs. Fras le SA | Metalurgica Gerdau vs. Clave Indices De | Metalurgica Gerdau vs. BTG Pactual Logstica |
| Bradespar vs. Metalurgica Gerdau SA | Bradespar vs. Companhia Siderrgica Nacional | Bradespar vs. Companhia Energtica de | Bradespar vs. Companhia Paranaense 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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