Correlation Between Metalurgica Gerdau and Cia De
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Cia De 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 Cia De 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 Cia de Ferro, you can compare the effects of market volatilities on Metalurgica Gerdau and Cia De 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 Cia De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Cia De.
Diversification Opportunities for Metalurgica Gerdau and Cia De
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metalurgica and Cia is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Cia de Ferro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cia de Ferro 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 Cia De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cia de Ferro has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Cia De go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Cia De
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to generate 1.18 times more return on investment than Cia De. However, Metalurgica Gerdau is 1.18 times more volatile than Cia de Ferro. It trades about 0.18 of its potential returns per unit of risk. Cia de Ferro is currently generating about 0.15 per unit of risk. If you would invest 1,003 in Metalurgica Gerdau SA on August 23, 2024 and sell it today you would earn a total of 90.00 from holding Metalurgica Gerdau SA or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. Cia de Ferro
Performance |
| Timeline |
| Metalurgica Gerdau |
| Cia de Ferro |
Metalurgica Gerdau and Cia De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Cia De
The main advantage of trading using opposite Metalurgica Gerdau and Cia De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Cia De 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 Cia De will offset losses from the drop in Cia De's long position.| Metalurgica Gerdau vs. Gerdau SA | Metalurgica Gerdau vs. Metalurgica Gerdau SA | Metalurgica Gerdau vs. Usinas Siderrgicas de | Metalurgica Gerdau vs. Bradespar SA |
| Cia De vs. Companhia Siderrgica Nacional | Cia De vs. Gerdau SA | Cia De vs. Metalurgica Gerdau SA | Cia De vs. Companhia Energtica 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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