Correlation Between Beyond Meat and Metalurgica Gerdau

Specify exactly 2 symbols:
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 Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Beyond Meat  vs.  Metalurgica Gerdau SA

 Performance 
       Timeline  
Beyond Meat 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Beyond Meat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Metalurgica Gerdau 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Metalurgica Gerdau SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Metalurgica Gerdau is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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.
The idea behind Beyond Meat and Metalurgica Gerdau SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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.

Other Complementary Tools

Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Stocks Directory
Find actively traded stocks across global markets