Correlation Between Gerdau SA and Neuberger Berman

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

Diversification Opportunities for Gerdau SA and Neuberger Berman

0.77

Correlation Coefficient

Gerdau SA  Neuberger Berman

Poor diversification

The 3 months correlation between Gerdau and Neuberger is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gerdau SA ADR and Neuberger Berman Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Floating 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 Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman Floating has no effect on the direction of Gerdau SA i.e., Gerdau SA and Neuberger Berman go up and down completely randomly.

Pair Corralation between Gerdau SA and Neuberger Berman

Considering the 90-day investment horizon Gerdau SA ADR is expected to generate 19.13 times more return on investment than Neuberger Berman. However, Gerdau SA is 19.13 times more volatile than Neuberger Berman Floating. It trades about 0.09 of its potential returns per unit of risk. Neuberger Berman Floating is currently generating about 0.25 per unit of risk. If you would invest  256.00  in Gerdau SA ADR on May 6, 2025 and sell it today you would earn a total of  30.00  from holding Gerdau SA ADR or generate 11.72% return on investment over 90 days.

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

Gerdau SA ADR  vs.  Neuberger Berman Floating

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 6 (%) 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.

Neuberger Berman Floating

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Floating are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Neuberger Berman 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 Neuberger Berman

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

The idea behind Gerdau SA ADR and Neuberger Berman Floating 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.