Correlation Between Metalurgica Gerdau and Unicasa Indstria
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Unicasa Indstria 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 Unicasa Indstria 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 Unicasa Indstria de, you can compare the effects of market volatilities on Metalurgica Gerdau and Unicasa Indstria 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 Unicasa Indstria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Unicasa Indstria.
Diversification Opportunities for Metalurgica Gerdau and Unicasa Indstria
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Metalurgica and Unicasa is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Unicasa Indstria de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unicasa Indstria 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 Unicasa Indstria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unicasa Indstria has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Unicasa Indstria go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Unicasa Indstria
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to generate 0.69 times more return on investment than Unicasa Indstria. However, Metalurgica Gerdau SA is 1.45 times less risky than Unicasa Indstria. It trades about 0.04 of its potential returns per unit of risk. Unicasa Indstria de is currently generating about -0.03 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 150.00 from holding Metalurgica Gerdau SA or generate 14.56% 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. Unicasa Indstria de
Performance |
| Timeline |
| Metalurgica Gerdau |
| Unicasa Indstria |
Metalurgica Gerdau and Unicasa Indstria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Unicasa Indstria
The main advantage of trading using opposite Metalurgica Gerdau and Unicasa Indstria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Unicasa Indstria 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 Unicasa Indstria will offset losses from the drop in Unicasa Indstria'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 |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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