Correlation Between Cyrela Brazil and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both Cyrela Brazil 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 Cyrela Brazil and Metalurgica Gerdau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cyrela Brazil Realty and Metalurgica Gerdau SA, you can compare the effects of market volatilities on Cyrela Brazil 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 Cyrela Brazil with a short position of Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyrela Brazil and Metalurgica Gerdau.
Diversification Opportunities for Cyrela Brazil and Metalurgica Gerdau
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cyrela and Metalurgica is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cyrela Brazil Realty and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau and Cyrela Brazil 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 Cyrela Brazil Realty 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 Cyrela Brazil i.e., Cyrela Brazil and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between Cyrela Brazil and Metalurgica Gerdau
Assuming the 90 days trading horizon Cyrela Brazil Realty is expected to under-perform the Metalurgica Gerdau. In addition to that, Cyrela Brazil is 1.26 times more volatile than Metalurgica Gerdau SA. It trades about -0.09 of its total potential returns per unit of risk. Metalurgica Gerdau SA is currently generating about 0.1 per unit of volatility. If you would invest 1,073 in Metalurgica Gerdau SA on September 12, 2024 and sell it today you would earn a total of 117.00 from holding Metalurgica Gerdau SA or generate 10.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cyrela Brazil Realty vs. Metalurgica Gerdau SA
Performance |
Timeline |
Cyrela Brazil Realty |
Metalurgica Gerdau |
Cyrela Brazil and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cyrela Brazil and Metalurgica Gerdau
The main advantage of trading using opposite Cyrela Brazil and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyrela Brazil 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.Cyrela Brazil vs. Tupy SA | Cyrela Brazil vs. Engie Brasil Energia | Cyrela Brazil vs. Grendene SA | Cyrela Brazil vs. M Dias Branco |
Metalurgica Gerdau vs. Gerdau SA | Metalurgica Gerdau vs. Metalurgica Gerdau SA | Metalurgica Gerdau vs. Usinas Siderrgicas de | Metalurgica Gerdau vs. Bradespar 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Transaction History View history of all your transactions and understand their impact on performance |