Correlation Between Metalurgica Gerdau and Lumen Technologies,

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

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

Diversification Opportunities for Metalurgica Gerdau and Lumen Technologies,

0.45

Correlation Coefficient

Metalurgica Gerdau  Lumen Technologies,

Very weak diversification

The 3 months correlation between Metalurgica and Lumen is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and Lumen Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumen Technologies, and Metalurgica Gerdau 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 Metalurgica Gerdau SA are associated (or correlated) with Lumen Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumen Technologies, has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and Lumen Technologies, go up and down completely randomly.

Pair Corralation between Metalurgica Gerdau and Lumen Technologies,

Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to under-perform the Lumen Technologies,. But the preferred stock apears to be less risky and, when comparing its historical volatility, Metalurgica Gerdau SA is 3.6 times less risky than Lumen Technologies,. The preferred stock trades about -0.01 of its potential returns per unit of risk. The Lumen Technologies, is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,616  in Lumen Technologies, on October 10, 2024 and sell it today you would earn a total of  761.00  from holding Lumen Technologies, or generate 29.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.99%
Values	Daily Returns

Metalurgica Gerdau SA  vs.  Lumen Technologies,

Metalurgica Gerdau

Risk-Adjusted Performance

0 of 100

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 latest uncertain performance, the Preferred Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Lumen Technologies,

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Lumen Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Lumen Technologies, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Metalurgica Gerdau and Lumen Technologies,

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

The idea behind Metalurgica Gerdau SA and Lumen Technologies, 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..