Correlation Between Metalurgica Gerdau and LESTE FDO
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and LESTE FDO 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 LESTE FDO 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 LESTE FDO INV, you can compare the effects of market volatilities on Metalurgica Gerdau and LESTE FDO 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 LESTE FDO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and LESTE FDO.
Diversification Opportunities for Metalurgica Gerdau and LESTE FDO
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metalurgica and LESTE is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and LESTE FDO INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LESTE FDO INV 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 LESTE FDO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LESTE FDO INV has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and LESTE FDO go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and LESTE FDO
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to generate 1.42 times more return on investment than LESTE FDO. However, Metalurgica Gerdau is 1.42 times more volatile than LESTE FDO INV. It trades about 0.04 of its potential returns per unit of risk. LESTE FDO INV is currently generating about -0.06 per unit of risk. If you would invest 1,050 in Metalurgica Gerdau SA on August 29, 2024 and sell it today you would earn a total of 72.00 from holding Metalurgica Gerdau SA or generate 6.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. LESTE FDO INV
Performance |
| Timeline |
| Metalurgica Gerdau |
| LESTE FDO INV |
Metalurgica Gerdau and LESTE FDO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and LESTE FDO
The main advantage of trading using opposite Metalurgica Gerdau and LESTE FDO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, LESTE FDO 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 LESTE FDO will offset losses from the drop in LESTE FDO'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 |
| LESTE FDO vs. Real Estate Investment | LESTE FDO vs. NAVI CRDITO IMOBILIRIO | LESTE FDO vs. LIFE CAPITAL PARTNERS | LESTE FDO vs. Cshg Jhsf Prime |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |