Correlation Between Metalurgica Gerdau and Hospital Mater
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Hospital Mater 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 Hospital Mater 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 Hospital Mater Dei, you can compare the effects of market volatilities on Metalurgica Gerdau and Hospital Mater 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 Hospital Mater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Hospital Mater.
Diversification Opportunities for Metalurgica Gerdau and Hospital Mater
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Metalurgica and Hospital is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Hospital Mater Dei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hospital Mater Dei 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 Hospital Mater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hospital Mater Dei has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Hospital Mater go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Hospital Mater
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to generate 0.94 times more return on investment than Hospital Mater. However, Metalurgica Gerdau SA is 1.06 times less risky than Hospital Mater. It trades about 0.24 of its potential returns per unit of risk. Hospital Mater Dei is currently generating about -0.08 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. Hospital Mater Dei
Performance |
| Timeline |
| Metalurgica Gerdau |
| Hospital Mater Dei |
Metalurgica Gerdau and Hospital Mater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Hospital Mater
The main advantage of trading using opposite Metalurgica Gerdau and Hospital Mater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Hospital Mater 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 Hospital Mater will offset losses from the drop in Hospital Mater'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 |
| Hospital Mater vs. Fras le SA | Hospital Mater vs. Western Digital | Hospital Mater vs. Energisa SA | Hospital Mater 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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