Correlation Between Tres Tentos and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both Tres Tentos 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 Tres Tentos and Metalurgica Gerdau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tres Tentos Agroindustrial and Metalurgica Gerdau SA, you can compare the effects of market volatilities on Tres Tentos 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 Tres Tentos with a short position of Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tres Tentos and Metalurgica Gerdau.
Diversification Opportunities for Tres Tentos and Metalurgica Gerdau
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tres and Metalurgica is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tres Tentos Agroindustrial and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau and Tres Tentos 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 Tres Tentos Agroindustrial 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 Tres Tentos i.e., Tres Tentos and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between Tres Tentos and Metalurgica Gerdau
Assuming the 90 days trading horizon Tres Tentos Agroindustrial is expected to generate 1.23 times more return on investment than Metalurgica Gerdau. However, Tres Tentos is 1.23 times more volatile than Metalurgica Gerdau SA. It trades about 0.03 of its potential returns per unit of risk. Metalurgica Gerdau SA is currently generating about 0.01 per unit of risk. If you would invest 1,089 in Tres Tentos Agroindustrial on August 23, 2024 and sell it today you would earn a total of 335.00 from holding Tres Tentos Agroindustrial or generate 30.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tres Tentos Agroindustrial vs. Metalurgica Gerdau SA
Performance |
| Timeline |
| Tres Tentos Agroindu |
| Metalurgica Gerdau |
Tres Tentos and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tres Tentos and Metalurgica Gerdau
The main advantage of trading using opposite Tres Tentos and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tres Tentos 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.| Tres Tentos vs. Ambipar Participaes e | Tres Tentos vs. BTG Pactual Logstica | Tres Tentos vs. Plano Plano Desenvolvimento | Tres Tentos vs. Companhia Habitasul de |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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