Correlation Between Metalurgica Gerdau and GP Investments
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and GP Investments 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 GP Investments 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 GP Investments, you can compare the effects of market volatilities on Metalurgica Gerdau and GP Investments 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 GP Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and GP Investments.
Diversification Opportunities for Metalurgica Gerdau and GP Investments
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Metalurgica and GPIV33 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and GP Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Investments 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 GP Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Investments has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and GP Investments go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and GP Investments
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to under-perform the GP Investments. But the preferred stock apears to be less risky and, when comparing its historical volatility, Metalurgica Gerdau SA is 1.97 times less risky than GP Investments. The preferred stock trades about -0.02 of its potential returns per unit of risk. The GP Investments is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 380.00 in GP Investments on October 26, 2024 and sell it today you would earn a total of 16.00 from holding GP Investments or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. GP Investments
Performance |
| Timeline |
| Metalurgica Gerdau |
| GP Investments |
Metalurgica Gerdau and GP Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and GP Investments
The main advantage of trading using opposite Metalurgica Gerdau and GP Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, GP Investments 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 GP Investments will offset losses from the drop in GP Investments' 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 |
| GP Investments vs. Metalurgica Gerdau SA | GP Investments vs. SSC Technologies Holdings, | GP Investments vs. Hospital Mater Dei | GP Investments vs. Palantir Technologies |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |