Correlation Between Santos Brasil and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both Santos Brasil and Metalurgica Gerdau 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 Santos Brasil and Metalurgica Gerdau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santos Brasil Participaes and Metalurgica Gerdau SA, you can compare the effects of market volatilities on Santos Brasil and Metalurgica Gerdau 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 Santos Brasil with a short position of Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santos Brasil and Metalurgica Gerdau.
Diversification Opportunities for Santos Brasil and Metalurgica Gerdau
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Santos and Metalurgica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Santos Brasil Participaes and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau and Santos Brasil 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 Santos Brasil Participaes are associated (or correlated) with Metalurgica Gerdau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalurgica Gerdau has no effect on the direction of Santos Brasil i.e., Santos Brasil and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between Santos Brasil and Metalurgica Gerdau
If you would invest 0.00 in Santos Brasil Participaes on October 29, 2024 and sell it today you would earn a total of 0.00 from holding Santos Brasil Participaes or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Santos Brasil Participaes vs. Metalurgica Gerdau SA
Performance |
| Timeline |
| Santos Brasil Participaes |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Metalurgica Gerdau |
Santos Brasil and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santos Brasil and Metalurgica Gerdau
The main advantage of trading using opposite Santos Brasil and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santos Brasil position performs unexpectedly, Metalurgica Gerdau 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 Metalurgica Gerdau will offset losses from the drop in Metalurgica Gerdau's long position.| Santos Brasil vs. Cognizant Technology Solutions | Santos Brasil vs. DENTSPLY SIRONA | Santos Brasil vs. Unity Software | Santos Brasil vs. Spotify Technology SA |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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