Correlation Between Beyond Meat and Metalurgica Gerdau
Can any of the company-specific risk be diversified away by investing in both Beyond Meat 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 Beyond Meat and Metalurgica Gerdau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Metalurgica Gerdau SA, you can compare the effects of market volatilities on Beyond Meat 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 Beyond Meat with a short position of Metalurgica Gerdau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Metalurgica Gerdau.
Diversification Opportunities for Beyond Meat and Metalurgica Gerdau
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beyond and Metalurgica is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and Metalurgica Gerdau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalurgica Gerdau and Beyond Meat 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 Beyond Meat 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 Beyond Meat i.e., Beyond Meat and Metalurgica Gerdau go up and down completely randomly.
Pair Corralation between Beyond Meat and Metalurgica Gerdau
Assuming the 90 days trading horizon Beyond Meat is expected to under-perform the Metalurgica Gerdau. In addition to that, Beyond Meat is 2.13 times more volatile than Metalurgica Gerdau SA. It trades about -0.13 of its total potential returns per unit of risk. Metalurgica Gerdau SA is currently generating about 0.01 per unit of volatility. If you would invest 996.00 in Metalurgica Gerdau SA on October 24, 2024 and sell it today you would earn a total of 2.00 from holding Metalurgica Gerdau SA or generate 0.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Beyond Meat vs. Metalurgica Gerdau SA
Performance |
Timeline |
Beyond Meat |
Metalurgica Gerdau |
Beyond Meat and Metalurgica Gerdau Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beyond Meat and Metalurgica Gerdau
The main advantage of trading using opposite Beyond Meat and Metalurgica Gerdau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat 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.Beyond Meat vs. Liberty Broadband | Beyond Meat vs. Metalurgica Gerdau SA | Beyond Meat vs. Zoom Video Communications | Beyond Meat vs. Ryanair Holdings plc |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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