Correlation Between Stora Enso and Suzano SA
Can any of the company-specific risk be diversified away by investing in both Stora Enso 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 Stora Enso and Suzano SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stora Enso Oyj and Suzano SA, you can compare the effects of market volatilities on Stora Enso 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 Stora Enso with a short position of Suzano SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stora Enso and Suzano SA.
Diversification Opportunities for Stora Enso and Suzano SA
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stora and Suzano is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and Suzano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzano SA and Stora Enso 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 Stora Enso Oyj 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 Stora Enso i.e., Stora Enso and Suzano SA go up and down completely randomly.
Pair Corralation between Stora Enso and Suzano SA
Assuming the 90 days trading horizon Stora Enso Oyj is expected to under-perform the Suzano SA. In addition to that, Stora Enso is 1.16 times more volatile than Suzano SA. It trades about -0.42 of its total potential returns per unit of risk. Suzano SA is currently generating about 0.22 per unit of volatility. If you would invest 930.00 in Suzano SA on August 24, 2024 and sell it today you would earn a total of 55.00 from holding Suzano SA or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stora Enso Oyj vs. Suzano SA
Performance |
| Timeline |
| Stora Enso Oyj |
| Suzano SA |
Stora Enso and Suzano SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stora Enso and Suzano SA
The main advantage of trading using opposite Stora Enso and Suzano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso 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.| Stora Enso vs. Superior Plus Corp | Stora Enso vs. Origin Agritech | Stora Enso vs. Identiv | Stora Enso vs. INTUITIVE SURGICAL |
| Suzano SA vs. Superior Plus Corp | Suzano SA vs. Origin Agritech | Suzano SA vs. Identiv | Suzano SA vs. INTUITIVE SURGICAL |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |