Correlation Between Metalurgica Gerdau and Delta Air
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Delta Air 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 Delta Air 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 Delta Air Lines, you can compare the effects of market volatilities on Metalurgica Gerdau and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Delta Air.
Diversification Opportunities for Metalurgica Gerdau and Delta Air
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Metalurgica and Delta is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Delta Air go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Delta Air
Assuming the 90 days trading horizon Metalurgica Gerdau is expected to generate 1.59 times less return on investment than Delta Air. But when comparing it to its historical volatility, Metalurgica Gerdau SA is 1.25 times less risky than Delta Air. It trades about 0.2 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 31,724 in Delta Air Lines on August 27, 2024 and sell it today you would earn a total of 4,980 from holding Delta Air Lines or generate 15.7% 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. Delta Air Lines
Performance |
| Timeline |
| Metalurgica Gerdau |
| Delta Air Lines |
Metalurgica Gerdau and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Delta Air
The main advantage of trading using opposite Metalurgica Gerdau and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.| Metalurgica Gerdau vs. Metalurgica Gerdau SA | Metalurgica Gerdau vs. Usinas Siderrgicas de | Metalurgica Gerdau vs. Bradespar SA | Metalurgica Gerdau vs. Companhia Paranaense de |
| Delta Air vs. METISA Metalrgica Timboense | Delta Air vs. Metalurgica Gerdau SA | Delta Air vs. Micron Technology | Delta Air vs. Take Two Interactive Software |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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