Correlation Between Klabin Sa and Stora Enso
Can any of the company-specific risk be diversified away by investing in both Klabin Sa and Stora Enso 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 Stora Enso 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 Stora Enso Oyj, you can compare the effects of market volatilities on Klabin Sa and Stora Enso 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 Stora Enso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klabin Sa and Stora Enso.
Diversification Opportunities for Klabin Sa and Stora Enso
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Klabin and Stora is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Klabin Sa A and Stora Enso Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stora Enso Oyj 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 Stora Enso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stora Enso Oyj has no effect on the direction of Klabin Sa i.e., Klabin Sa and Stora Enso go up and down completely randomly.
Pair Corralation between Klabin Sa and Stora Enso
Assuming the 90 days horizon Klabin Sa A is expected to generate 2.8 times more return on investment than Stora Enso. However, Klabin Sa is 2.8 times more volatile than Stora Enso Oyj. It trades about 0.03 of its potential returns per unit of risk. Stora Enso Oyj is currently generating about -0.07 per unit of risk. If you would invest 622.00 in Klabin Sa A on August 25, 2024 and sell it today you would earn a total of 112.00 from holding Klabin Sa A or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 34.5% |
| Values | Daily Returns |
Klabin Sa A vs. Stora Enso Oyj
Performance |
| Timeline |
| Klabin Sa A |
| Stora Enso Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Klabin Sa and Stora Enso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klabin Sa and Stora Enso
The main advantage of trading using opposite Klabin Sa and Stora Enso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klabin Sa position performs unexpectedly, Stora Enso 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 Stora Enso will offset losses from the drop in Stora Enso'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 |
| Stora Enso vs. Nine Dragons Paper | Stora Enso vs. Canfor Pulp Products | Stora Enso vs. Mondi PLC ADR | Stora Enso vs. Clearwater 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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