Correlation Between Metalurgica Gerdau and Usinas Siderrgicas
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Usinas Siderrgicas 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 Usinas Siderrgicas 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 Usinas Siderrgicas de, you can compare the effects of market volatilities on Metalurgica Gerdau and Usinas Siderrgicas 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 Usinas Siderrgicas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Usinas Siderrgicas.
Diversification Opportunities for Metalurgica Gerdau and Usinas Siderrgicas
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Metalurgica and Usinas is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Usinas Siderrgicas de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usinas Siderrgicas 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 Usinas Siderrgicas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usinas Siderrgicas has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Usinas Siderrgicas go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Usinas Siderrgicas
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to under-perform the Usinas Siderrgicas. But the preferred stock apears to be less risky and, when comparing its historical volatility, Metalurgica Gerdau SA is 1.3 times less risky than Usinas Siderrgicas. The preferred stock trades about -0.07 of its potential returns per unit of risk. The Usinas Siderrgicas de is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 561.00 in Usinas Siderrgicas de on January 28, 2025 and sell it today you would earn a total of 13.00 from holding Usinas Siderrgicas de or generate 2.32% 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. Usinas Siderrgicas de
Performance |
| Timeline |
| Metalurgica Gerdau |
| Usinas Siderrgicas |
Metalurgica Gerdau and Usinas Siderrgicas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Usinas Siderrgicas
The main advantage of trading using opposite Metalurgica Gerdau and Usinas Siderrgicas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Usinas Siderrgicas 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 Usinas Siderrgicas will offset losses from the drop in Usinas Siderrgicas' 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 |
| Usinas Siderrgicas vs. Usinas Siderrgicas de | Usinas Siderrgicas vs. Companhia Siderrgica Nacional | Usinas Siderrgicas vs. Gerdau SA | Usinas Siderrgicas vs. 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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