Correlation Between Gerdau SA and Harvard Apparatus

Can any of the company-specific risk be diversified away by investing in both Gerdau SA and Harvard Apparatus 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 Gerdau SA and Harvard Apparatus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gerdau SA ADR and Harvard Apparatus Regenerative, you can compare the effects of market volatilities on Gerdau SA and Harvard Apparatus 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 Gerdau SA with a short position of Harvard Apparatus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerdau SA and Harvard Apparatus.

Diversification Opportunities for Gerdau SA and Harvard Apparatus

0.03

Correlation Coefficient

Gerdau SA  Harvard Apparatus

Significant diversification

The 3 months correlation between Gerdau and Harvard is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA ADR and Harvard Apparatus Regenerative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvard Apparatus and Gerdau SA 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 Gerdau SA ADR are associated (or correlated) with Harvard Apparatus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvard Apparatus has no effect on the direction of Gerdau SA i.e., Gerdau SA and Harvard Apparatus go up and down completely randomly.

Pair Corralation between Gerdau SA and Harvard Apparatus

If you would invest  420.00  in Harvard Apparatus Regenerative on October 6, 2024 and sell it today you would earn a total of  0.00  from holding Harvard Apparatus Regenerative or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.32%
Values	Daily Returns

Gerdau SA ADR  vs.  Harvard Apparatus Regenerative

Gerdau SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gerdau SA ADR 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 technical and fundamental 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.

Harvard Apparatus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvard Apparatus Regenerative has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Harvard Apparatus is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gerdau SA and Harvard Apparatus

The main advantage of trading using opposite Gerdau SA and Harvard Apparatus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerdau SA position performs unexpectedly, Harvard Apparatus 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 Harvard Apparatus will offset losses from the drop in Harvard Apparatus' long position.

The idea behind Gerdau SA ADR and Harvard Apparatus Regenerative 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.