Correlation Between Klabin Sa and Canfor Pulp
Can any of the company-specific risk be diversified away by investing in both Klabin Sa and Canfor Pulp 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 Klabin Sa and Canfor Pulp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klabin Sa A and Canfor Pulp Products, you can compare the effects of market volatilities on Klabin Sa and Canfor Pulp 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 Klabin Sa with a short position of Canfor Pulp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klabin Sa and Canfor Pulp.
Diversification Opportunities for Klabin Sa and Canfor Pulp
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Klabin and Canfor is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Klabin Sa A and Canfor Pulp Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor Pulp Products and Klabin Sa 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 Klabin Sa A are associated (or correlated) with Canfor Pulp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor Pulp Products has no effect on the direction of Klabin Sa i.e., Klabin Sa and Canfor Pulp go up and down completely randomly.
Pair Corralation between Klabin Sa and Canfor Pulp
Assuming the 90 days horizon Klabin Sa A is expected to generate 1.24 times more return on investment than Canfor Pulp. However, Klabin Sa is 1.24 times more volatile than Canfor Pulp Products. It trades about 0.02 of its potential returns per unit of risk. Canfor Pulp Products is currently generating about -0.05 per unit of risk. If you would invest 773.00 in Klabin Sa A on August 29, 2024 and sell it today you would lose (39.00) from holding Klabin Sa A or give up 5.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.33% |
| Values | Daily Returns |
Klabin Sa A vs. Canfor Pulp Products
Performance |
| Timeline |
| Klabin Sa A |
| Canfor Pulp Products |
Klabin Sa and Canfor Pulp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klabin Sa and Canfor Pulp
The main advantage of trading using opposite Klabin Sa and Canfor Pulp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klabin Sa position performs unexpectedly, Canfor Pulp 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 Canfor Pulp will offset losses from the drop in Canfor Pulp's long position.| Klabin Sa vs. Mondi PLC ADR | Klabin Sa vs. Suzano Papel e | Klabin Sa vs. Nine Dragons Paper | Klabin Sa vs. Nine Dragons Paper |
| Canfor Pulp vs. Nine Dragons Paper | Canfor Pulp vs. Nine Dragons Paper | Canfor Pulp vs. Mondi PLC ADR | Canfor Pulp vs. Klabin Sa A |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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