Correlation Between Klabin Sa and Sappi
Can any of the company-specific risk be diversified away by investing in both Klabin Sa and Sappi 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 Sappi 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 Sappi Ltd ADR, you can compare the effects of market volatilities on Klabin Sa and Sappi 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 Sappi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klabin Sa and Sappi.
Diversification Opportunities for Klabin Sa and Sappi
Significant diversification
The 3 months correlation between Klabin and Sappi is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Klabin Sa A and Sappi Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sappi Ltd ADR 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 Sappi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sappi Ltd ADR has no effect on the direction of Klabin Sa i.e., Klabin Sa and Sappi go up and down completely randomly.
Pair Corralation between Klabin Sa and Sappi
If you would invest 714.00 in Klabin Sa A on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Klabin Sa A or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Klabin Sa A vs. Sappi Ltd ADR
Performance |
| Timeline |
| Klabin Sa A |
| Sappi Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Klabin Sa and Sappi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klabin Sa and Sappi
The main advantage of trading using opposite Klabin Sa and Sappi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klabin Sa position performs unexpectedly, Sappi 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 Sappi will offset losses from the drop in Sappi'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 |
| Sappi vs. Nine Dragons Paper | Sappi vs. Nine Dragons Paper | Sappi vs. Mondi PLC ADR | Sappi 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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