Correlation Between Metalurgica Gerdau and DENTSPLY SIRONA
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and DENTSPLY SIRONA 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 DENTSPLY SIRONA 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 DENTSPLY SIRONA, you can compare the effects of market volatilities on Metalurgica Gerdau and DENTSPLY SIRONA 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 DENTSPLY SIRONA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and DENTSPLY SIRONA.
Diversification Opportunities for Metalurgica Gerdau and DENTSPLY SIRONA
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Metalurgica and DENTSPLY is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and DENTSPLY SIRONA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DENTSPLY SIRONA 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 DENTSPLY SIRONA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DENTSPLY SIRONA has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and DENTSPLY SIRONA go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and DENTSPLY SIRONA
Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to under-perform the DENTSPLY SIRONA. In addition to that, Metalurgica Gerdau is 16.45 times more volatile than DENTSPLY SIRONA. It trades about -0.53 of its total potential returns per unit of risk. DENTSPLY SIRONA is currently generating about 0.24 per unit of volatility. If you would invest 13,955 in DENTSPLY SIRONA on October 17, 2024 and sell it today you would earn a total of 68.00 from holding DENTSPLY SIRONA or generate 0.49% 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. DENTSPLY SIRONA
Performance |
| Timeline |
| Metalurgica Gerdau |
| DENTSPLY SIRONA |
Metalurgica Gerdau and DENTSPLY SIRONA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and DENTSPLY SIRONA
The main advantage of trading using opposite Metalurgica Gerdau and DENTSPLY SIRONA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, DENTSPLY SIRONA 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 DENTSPLY SIRONA will offset losses from the drop in DENTSPLY SIRONA'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 |
| DENTSPLY SIRONA vs. Brpr Corporate Offices | DENTSPLY SIRONA vs. Nordon Indstrias Metalrgicas | DENTSPLY SIRONA vs. Applied Materials, | DENTSPLY SIRONA 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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