Correlation Between Gerdau SA and Multi Index
Can any of the company-specific risk be diversified away by investing in both Gerdau SA and Multi Index 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 Multi Index 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 Multi Index 2045 Lifetime, you can compare the effects of market volatilities on Gerdau SA and Multi Index 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 Multi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerdau SA and Multi Index.
Diversification Opportunities for Gerdau SA and Multi Index
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gerdau and Multi is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA ADR and Multi Index 2045 Lifetime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Index 2045 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 Multi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Index 2045 has no effect on the direction of Gerdau SA i.e., Gerdau SA and Multi Index go up and down completely randomly.
Pair Corralation between Gerdau SA and Multi Index
Considering the 90-day investment horizon Gerdau SA is expected to generate 1.09 times less return on investment than Multi Index. In addition to that, Gerdau SA is 4.26 times more volatile than Multi Index 2045 Lifetime. It trades about 0.05 of its total potential returns per unit of risk. Multi Index 2045 Lifetime is currently generating about 0.23 per unit of volatility. If you would invest 1,482 in Multi Index 2045 Lifetime on May 27, 2025 and sell it today you would earn a total of 120.00 from holding Multi Index 2045 Lifetime or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gerdau SA ADR vs. Multi Index 2045 Lifetime
Performance |
| Timeline |
| Gerdau SA ADR |
| Multi Index 2045 |
Gerdau SA and Multi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerdau SA and Multi Index
The main advantage of trading using opposite Gerdau SA and Multi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerdau SA position performs unexpectedly, Multi Index 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 Multi Index will offset losses from the drop in Multi Index's long position.| Gerdau SA vs. Companhia Siderurgica Nacional | Gerdau SA vs. Ternium SA ADR | Gerdau SA vs. ArcelorMittal SA ADR | Gerdau SA vs. Commercial Metals |
| Multi Index vs. Ashmore Emerging Markets | Multi Index vs. Angel Oak Multi Strategy | Multi Index vs. Doubleline Emerging Markets | Multi Index vs. T Rowe Price |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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