Correlation Between Metalurgica Gerdau and Academy Sports
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Academy Sports 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 Academy Sports 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 Academy Sports and, you can compare the effects of market volatilities on Metalurgica Gerdau and Academy Sports 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 Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Academy Sports.
Diversification Opportunities for Metalurgica Gerdau and Academy Sports
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Metalurgica and Academy is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Academy Sports and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports 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 Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Academy Sports go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Academy Sports
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to under-perform the Academy Sports. In addition to that, Metalurgica Gerdau is 4.3 times more volatile than Academy Sports and. It trades about -0.1 of its total potential returns per unit of risk. Academy Sports and is currently generating about -0.34 per unit of volatility. If you would invest 8,640 in Academy Sports and on November 3, 2024 and sell it today you would lose (248.00) from holding Academy Sports and or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 78.26% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. Academy Sports and
Performance |
| Timeline |
| Metalurgica Gerdau |
| Academy Sports |
Metalurgica Gerdau and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Academy Sports
The main advantage of trading using opposite Metalurgica Gerdau and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Academy Sports 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 Academy Sports will offset losses from the drop in Academy Sports' long position.| Metalurgica Gerdau vs. Usinas Siderrgicas de | Metalurgica Gerdau vs. Gerdau SA | Metalurgica Gerdau vs. Companhia Siderrgica Nacional | Metalurgica Gerdau vs. Companhia Energtica de |
| Academy Sports vs. Spotify Technology SA | Academy Sports vs. KB Financial Group | Academy Sports vs. Prudential Financial | Academy Sports vs. Deutsche Bank Aktiengesellschaft |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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