Correlation Between Metalurgica Gerdau and Livetech
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Livetech 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 Livetech 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 Livetech da Bahia, you can compare the effects of market volatilities on Metalurgica Gerdau and Livetech 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 Livetech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Livetech.
Diversification Opportunities for Metalurgica Gerdau and Livetech
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metalurgica and Livetech is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Livetech da Bahia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livetech da Bahia 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 Livetech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livetech da Bahia has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Livetech go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Livetech
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to generate 0.68 times more return on investment than Livetech. However, Metalurgica Gerdau SA is 1.47 times less risky than Livetech. It trades about 0.04 of its potential returns per unit of risk. Livetech da Bahia is currently generating about -0.07 per unit of risk. If you would invest 1,030 in Metalurgica Gerdau SA on September 12, 2024 and sell it today you would earn a total of 160.00 from holding Metalurgica Gerdau SA or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. Livetech da Bahia
Performance |
| Timeline |
| Metalurgica Gerdau |
| Livetech da Bahia |
Metalurgica Gerdau and Livetech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Livetech
The main advantage of trading using opposite Metalurgica Gerdau and Livetech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Livetech 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 Livetech will offset losses from the drop in Livetech'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 |
| Livetech vs. CM Hospitalar SA | Livetech vs. Healthpeak Properties | Livetech vs. United Rentals | Livetech vs. Metalurgica Gerdau 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |