Correlation Between Metalurgica Gerdau and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on Metalurgica Gerdau and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Uber Technologies.
Diversification Opportunities for Metalurgica Gerdau and Uber Technologies
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metalurgica and Uber is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Uber Technologies go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Uber Technologies
Assuming the 90 days trading horizon Metalurgica Gerdau is expected to generate 3.04 times less return on investment than Uber Technologies. But when comparing it to its historical volatility, Metalurgica Gerdau SA is 1.77 times less risky than Uber Technologies. It trades about 0.04 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,466 in Uber Technologies on September 2, 2024 and sell it today you would earn a total of 3,360 from holding Uber Technologies or generate 45.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. Uber Technologies
Performance |
| Timeline |
| Metalurgica Gerdau |
| Uber Technologies |
Metalurgica Gerdau and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Uber Technologies
The main advantage of trading using opposite Metalurgica Gerdau and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' 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 |
| Uber Technologies vs. Metalrgica Riosulense SA | Uber Technologies vs. Mitsubishi UFJ Financial | Uber Technologies vs. Tyson Foods | Uber Technologies vs. Sumitomo Mitsui Financial |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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