Correlation Between BPM and Klabin Sa
Can any of the company-specific risk be diversified away by investing in both BPM and Klabin 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 BPM and Klabin Sa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BPM Inc and Klabin Sa A, you can compare the effects of market volatilities on BPM and Klabin 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 BPM with a short position of Klabin Sa. Check out your portfolio center. Please also check ongoing floating volatility patterns of BPM and Klabin Sa.
Diversification Opportunities for BPM and Klabin Sa
Pay attention - limited upside
The 3 months correlation between BPM and Klabin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BPM Inc and Klabin Sa A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klabin Sa A and BPM 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 BPM Inc are associated (or correlated) with Klabin Sa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klabin Sa A has no effect on the direction of BPM i.e., BPM and Klabin Sa go up and down completely randomly.
Pair Corralation between BPM and Klabin Sa
If you would invest 745.00 in Klabin Sa A on November 2, 2024 and sell it today you would earn a total of 8.00 from holding Klabin Sa A or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.97% |
| Values | Daily Returns |
BPM Inc vs. Klabin Sa A
Performance |
| Timeline |
| BPM Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Klabin Sa A |
BPM and Klabin Sa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BPM and Klabin Sa
The main advantage of trading using opposite BPM and Klabin Sa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BPM position performs unexpectedly, Klabin 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 Klabin Sa will offset losses from the drop in Klabin Sa's long position.The idea behind BPM Inc and Klabin Sa A 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.| Klabin Sa vs. Mondi PLC ADR | Klabin Sa vs. Suzano Papel e | Klabin Sa vs. Nine Dragons Paper | Klabin Sa vs. Nine Dragons Paper |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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