Correlation Between Metalurgica Gerdau and DaVita
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and DaVita 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 DaVita 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 DaVita Inc, you can compare the effects of market volatilities on Metalurgica Gerdau and DaVita 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 DaVita. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and DaVita.
Diversification Opportunities for Metalurgica Gerdau and DaVita
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Metalurgica and DaVita is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and DaVita Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DaVita Inc 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 DaVita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DaVita Inc has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and DaVita go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and DaVita
Assuming the 90 days trading horizon Metalurgica Gerdau is expected to generate 1.62 times less return on investment than DaVita. In addition to that, Metalurgica Gerdau is 1.34 times more volatile than DaVita Inc. It trades about 0.27 of its total potential returns per unit of risk. DaVita Inc is currently generating about 0.58 per unit of volatility. If you would invest 84,000 in DaVita Inc on September 4, 2024 and sell it today you would earn a total of 18,800 from holding DaVita Inc or generate 22.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. DaVita Inc
Performance |
| Timeline |
| Metalurgica Gerdau |
| DaVita Inc |
Metalurgica Gerdau and DaVita Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and DaVita
The main advantage of trading using opposite Metalurgica Gerdau and DaVita positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, DaVita 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 DaVita will offset losses from the drop in DaVita's long position.| Metalurgica Gerdau vs. Companhia Siderrgica Nacional | Metalurgica Gerdau vs. Banco Bradesco SA | Metalurgica Gerdau vs. Vale SA | Metalurgica Gerdau vs. Petrleo Brasileiro SA |
| DaVita vs. Multilaser Industrial SA | DaVita vs. Charter Communications | DaVita vs. Metalurgica Gerdau SA | DaVita vs. Paycom Software |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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