Correlation Between Metalurgica Gerdau and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Metalurgica Gerdau 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 Metalurgica Gerdau 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 Metalurgica Gerdau SA, you can compare the effects of market volatilities on Metalurgica Gerdau and Metalurgica Gerdau 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 Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Metalurgica Gerdau.
Diversification Opportunities for Metalurgica Gerdau and Metalurgica Gerdau
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metalurgica and Metalurgica is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau 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 Metalurgica Gerdau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalurgica Gerdau has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Metalurgica Gerdau
Assuming the 90 days trading horizon Metalurgica Gerdau is expected to generate 1.07 times less return on investment than Metalurgica Gerdau. In addition to that, Metalurgica Gerdau is 1.01 times more volatile than Metalurgica Gerdau SA. It trades about 0.17 of its total potential returns per unit of risk. Metalurgica Gerdau SA is currently generating about 0.18 per unit of volatility. If you would invest 1,003 in Metalurgica Gerdau SA on August 23, 2024 and sell it today you would earn a total of 90.00 from holding Metalurgica Gerdau SA or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. Metalurgica Gerdau SA
Performance |
| Timeline |
| Metalurgica Gerdau |
| Metalurgica Gerdau |
Metalurgica Gerdau and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Metalurgica Gerdau
The main advantage of trading using opposite Metalurgica Gerdau and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Metalurgica Gerdau 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 Metalurgica Gerdau will offset losses from the drop in Metalurgica Gerdau's 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 |
| Metalurgica Gerdau vs. Gerdau SA | Metalurgica Gerdau vs. Metalurgica Gerdau SA | Metalurgica Gerdau vs. Usinas Siderrgicas de | Metalurgica Gerdau vs. Bradespar SA |
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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