Correlation Between Gerdau SA and Massmutual Premier

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

Diversification Opportunities for Gerdau SA and Massmutual Premier

0.38

Correlation Coefficient

Gerdau SA  Massmutual Premier

Weak diversification

The 3 months correlation between Gerdau and Massmutual is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA ADR and Massmutual Premier Inflation P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier 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 Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier has no effect on the direction of Gerdau SA i.e., Gerdau SA and Massmutual Premier go up and down completely randomly.

Pair Corralation between Gerdau SA and Massmutual Premier

Considering the 90-day investment horizon Gerdau SA ADR is expected to generate 8.79 times more return on investment than Massmutual Premier. However, Gerdau SA is 8.79 times more volatile than Massmutual Premier Inflation Protected. It trades about 0.11 of its potential returns per unit of risk. Massmutual Premier Inflation Protected is currently generating about 0.08 per unit of risk. If you would invest  251.00  in Gerdau SA ADR on May 7, 2025 and sell it today you would earn a total of  41.00  from holding Gerdau SA ADR or generate 16.33% 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.  Massmutual Premier Inflation P

Gerdau SA ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gerdau SA ADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Gerdau SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Massmutual Premier

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Massmutual Premier Inflation Protected are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Massmutual Premier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gerdau SA and Massmutual Premier

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

The idea behind Gerdau SA ADR and Massmutual Premier Inflation Protected 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.