Correlation Between Cable One and Suzano SA
Can any of the company-specific risk be diversified away by investing in both Cable One and Suzano 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 Cable One and Suzano SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Suzano SA, you can compare the effects of market volatilities on Cable One and Suzano 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 Cable One with a short position of Suzano SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Suzano SA.
Diversification Opportunities for Cable One and Suzano SA
Poor diversification
The 3 months correlation between Cable and Suzano is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Suzano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzano SA and Cable One 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 Cable One are associated (or correlated) with Suzano SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzano SA has no effect on the direction of Cable One i.e., Cable One and Suzano SA go up and down completely randomly.
Pair Corralation between Cable One and Suzano SA
Assuming the 90 days trading horizon Cable One is expected to generate 1.54 times more return on investment than Suzano SA. However, Cable One is 1.54 times more volatile than Suzano SA. It trades about 0.09 of its potential returns per unit of risk. Suzano SA is currently generating about 0.11 per unit of risk. If you would invest 895.00 in Cable One on August 24, 2024 and sell it today you would earn a total of 278.00 from holding Cable One or generate 31.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cable One vs. Suzano SA
Performance |
| Timeline |
| Cable One |
| Suzano SA |
Cable One and Suzano SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Suzano SA
The main advantage of trading using opposite Cable One and Suzano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One position performs unexpectedly, Suzano 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 Suzano SA will offset losses from the drop in Suzano SA's long position.| Cable One vs. Credit Acceptance | Cable One vs. Sumitomo Mitsui Financial | Cable One vs. Mitsubishi UFJ Financial | Cable One vs. Micron Technology |
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.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stocks Directory Find actively traded stocks across global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |