Correlation Between Klabin SA and Indstrias Romi
Can any of the company-specific risk be diversified away by investing in both Klabin SA and Indstrias Romi 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 Indstrias Romi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klabin SA and Indstrias Romi SA, you can compare the effects of market volatilities on Klabin SA and Indstrias Romi 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 Indstrias Romi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klabin SA and Indstrias Romi.
Diversification Opportunities for Klabin SA and Indstrias Romi
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Klabin and Indstrias is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Klabin SA and Indstrias Romi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indstrias Romi SA 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 are associated (or correlated) with Indstrias Romi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indstrias Romi SA has no effect on the direction of Klabin SA i.e., Klabin SA and Indstrias Romi go up and down completely randomly.
Pair Corralation between Klabin SA and Indstrias Romi
Assuming the 90 days trading horizon Klabin SA is expected to generate 1.65 times more return on investment than Indstrias Romi. However, Klabin SA is 1.65 times more volatile than Indstrias Romi SA. It trades about 0.12 of its potential returns per unit of risk. Indstrias Romi SA is currently generating about -0.15 per unit of risk. If you would invest 412.00 in Klabin SA on August 27, 2024 and sell it today you would earn a total of 19.00 from holding Klabin SA or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Klabin SA vs. Indstrias Romi SA
Performance |
| Timeline |
| Klabin SA |
| Indstrias Romi SA |
Klabin SA and Indstrias Romi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klabin SA and Indstrias Romi
The main advantage of trading using opposite Klabin SA and Indstrias Romi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klabin SA position performs unexpectedly, Indstrias Romi 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 Indstrias Romi will offset losses from the drop in Indstrias Romi's long position.| Klabin SA vs. Klabin SA | Klabin SA vs. Transmissora Aliana de | Klabin SA vs. Itasa Investimentos | Klabin SA vs. Suzano SA |
| Indstrias Romi vs. METISA Metalrgica Timboense | Indstrias Romi vs. Lupatech SA | Indstrias Romi vs. Recrusul SA | Indstrias Romi vs. Fras le SA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |