Correlation Between Metalurgica Gerdau and CRISPR Therapeutics
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and CRISPR Therapeutics 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 CRISPR Therapeutics 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 CRISPR Therapeutics AG, you can compare the effects of market volatilities on Metalurgica Gerdau and CRISPR Therapeutics 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 CRISPR Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and CRISPR Therapeutics.
Diversification Opportunities for Metalurgica Gerdau and CRISPR Therapeutics
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metalurgica and CRISPR is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and CRISPR Therapeutics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRISPR Therapeutics 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 CRISPR Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRISPR Therapeutics has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and CRISPR Therapeutics go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and CRISPR Therapeutics
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to under-perform the CRISPR Therapeutics. But the preferred stock apears to be less risky and, when comparing its historical volatility, Metalurgica Gerdau SA is 1.71 times less risky than CRISPR Therapeutics. The preferred stock trades about -0.01 of its potential returns per unit of risk. The CRISPR Therapeutics AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,124 in CRISPR Therapeutics AG on October 19, 2024 and sell it today you would lose (58.00) from holding CRISPR Therapeutics AG or give up 1.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. CRISPR Therapeutics AG
Performance |
| Timeline |
| Metalurgica Gerdau |
| CRISPR Therapeutics |
Metalurgica Gerdau and CRISPR Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and CRISPR Therapeutics
The main advantage of trading using opposite Metalurgica Gerdau and CRISPR Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, CRISPR Therapeutics 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 CRISPR Therapeutics will offset losses from the drop in CRISPR Therapeutics' 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 |
| CRISPR Therapeutics vs. Metalurgica Gerdau SA | CRISPR Therapeutics vs. Academy Sports and | CRISPR Therapeutics vs. Fresenius Medical Care | CRISPR Therapeutics vs. Costco Wholesale |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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