Correlation Between Metalurgica Gerdau and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and Zoom Video 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 Zoom Video 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 Zoom Video Communications, you can compare the effects of market volatilities on Metalurgica Gerdau and Zoom Video 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 Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and Zoom Video.
Diversification Opportunities for Metalurgica Gerdau and Zoom Video
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Metalurgica and Zoom is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Zoom Video go up and down completely randomly.
Pair Corralation between Metalurgica Gerdau and Zoom Video
Assuming the 90 days trading horizon Metalurgica Gerdau is expected to generate 1.39 times less return on investment than Zoom Video. But when comparing it to its historical volatility, Metalurgica Gerdau SA is 1.1 times less risky than Zoom Video. It trades about 0.2 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,654 in Zoom Video Communications on August 24, 2024 and sell it today you would earn a total of 244.00 from holding Zoom Video Communications or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Metalurgica Gerdau SA vs. Zoom Video Communications
Performance |
| Timeline |
| Metalurgica Gerdau |
| Zoom Video Communications |
Metalurgica Gerdau and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metalurgica Gerdau and Zoom Video
The main advantage of trading using opposite Metalurgica Gerdau and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metalurgica Gerdau position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video'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 |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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