Correlation Between Vape Holdings and Gerdau SA

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

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

Diversification Opportunities for Vape Holdings and Gerdau SA

0.22

Correlation Coefficient

Vape Holdings  Gerdau SA

Modest diversification

The 3 months correlation between Vape and Gerdau is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Vape Holdings and Gerdau SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerdau SA ADR and Vape Holdings 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 Vape Holdings are associated (or correlated) with Gerdau SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gerdau SA ADR has no effect on the direction of Vape Holdings i.e., Vape Holdings and Gerdau SA go up and down completely randomly.

Pair Corralation between Vape Holdings and Gerdau SA

Given the investment horizon of 90 days Vape Holdings is expected to generate 28.95 times more return on investment than Gerdau SA. However, Vape Holdings is 28.95 times more volatile than Gerdau SA ADR. It trades about 0.11 of its potential returns per unit of risk. Gerdau SA ADR is currently generating about 0.11 per unit of risk. If you would invest  688.00  in Vape Holdings on May 7, 2025 and sell it today you would earn a total of  1,055  from holding Vape Holdings or generate 153.34% return on investment over 90 days.

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

Vape Holdings  vs.  Gerdau SA ADR

Vape Holdings

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Vape Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Vape Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gerdau SA ADR

Risk-Adjusted Performance

Fair

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.

Pair Trading with Vape Holdings and Gerdau SA

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

The idea behind Vape Holdings and Gerdau SA ADR 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.