Correlation Between Companhia Paranaense and Klabin SA
Can any of the company-specific risk be diversified away by investing in both Companhia Paranaense 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 Companhia Paranaense and Klabin SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Paranaense de and Klabin SA, you can compare the effects of market volatilities on Companhia Paranaense 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 Companhia Paranaense with a short position of Klabin SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Paranaense and Klabin SA.
Diversification Opportunities for Companhia Paranaense and Klabin SA
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Companhia and Klabin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Paranaense de and Klabin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klabin SA and Companhia Paranaense 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 Companhia Paranaense de 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 has no effect on the direction of Companhia Paranaense i.e., Companhia Paranaense and Klabin SA go up and down completely randomly.
Pair Corralation between Companhia Paranaense and Klabin SA
Assuming the 90 days trading horizon Companhia Paranaense de is expected to under-perform the Klabin SA. But the stock apears to be less risky and, when comparing its historical volatility, Companhia Paranaense de is 1.02 times less risky than Klabin SA. The stock trades about -0.02 of its potential returns per unit of risk. The Klabin SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 408.00 in Klabin SA on October 26, 2024 and sell it today you would earn a total of 65.00 from holding Klabin SA or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Companhia Paranaense de vs. Klabin SA
Performance |
| Timeline |
| Companhia Paranaense |
| Klabin SA |
Companhia Paranaense and Klabin SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Paranaense and Klabin SA
The main advantage of trading using opposite Companhia Paranaense and Klabin SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Paranaense 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.| Companhia Paranaense vs. Companhia Paranaense de | Companhia Paranaense vs. CTEEP Companhia | Companhia Paranaense vs. Companhia Energtica de | Companhia Paranaense vs. CPFL Energia SA |
| Klabin SA vs. Klabin SA | Klabin SA vs. Transmissora Aliana de | Klabin SA vs. Klabin SA | Klabin SA vs. Itasa Investimentos |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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