Correlation Between Metalurgica Gerdau and PENN Entertainment,

Can any of the company-specific risk be diversified away by investing in both Metalurgica Gerdau and PENN Entertainment, 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 PENN Entertainment, 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 PENN Entertainment,, you can compare the effects of market volatilities on Metalurgica Gerdau and PENN Entertainment, 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 PENN Entertainment,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metalurgica Gerdau and PENN Entertainment,.

Diversification Opportunities for Metalurgica Gerdau and PENN Entertainment,

0.53

Correlation Coefficient

Metalurgica Gerdau  PENN Entertainment,

Very weak diversification

The 3 months correlation between Metalurgica and PENN is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Metalurgica Gerdau SA and PENN Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment, 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 PENN Entertainment,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN Entertainment, has no effect on the direction of Metalurgica Gerdau i.e., Metalurgica Gerdau and PENN Entertainment, go up and down completely randomly.

Pair Corralation between Metalurgica Gerdau and PENN Entertainment,

Assuming the 90 days trading horizon Metalurgica Gerdau SA is expected to under-perform the PENN Entertainment,. In addition to that, Metalurgica Gerdau is 1.31 times more volatile than PENN Entertainment,. It trades about -0.04 of its total potential returns per unit of risk. PENN Entertainment, is currently generating about 0.13 per unit of volatility. If you would invest  1,045  in PENN Entertainment, on October 9, 2024 and sell it today you would earn a total of  126.00  from holding PENN Entertainment, or generate 12.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Metalurgica Gerdau SA  vs.  PENN Entertainment,

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 comparatively stable basic indicators, Metalurgica Gerdau is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

PENN Entertainment,

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PENN Entertainment, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, PENN Entertainment, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Metalurgica Gerdau and PENN Entertainment,

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

The idea behind Metalurgica Gerdau SA and PENN Entertainment, 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.