Correlation Between Klabin SA and Transmissora Aliana
Can any of the company-specific risk be diversified away by investing in both Klabin SA and Transmissora Aliana 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 Transmissora Aliana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klabin SA and Transmissora Aliana de, you can compare the effects of market volatilities on Klabin SA and Transmissora Aliana 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 Transmissora Aliana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klabin SA and Transmissora Aliana.
Diversification Opportunities for Klabin SA and Transmissora Aliana
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Klabin and Transmissora is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Klabin SA and Transmissora Aliana de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transmissora Aliana 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 Transmissora Aliana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transmissora Aliana has no effect on the direction of Klabin SA i.e., Klabin SA and Transmissora Aliana go up and down completely randomly.
Pair Corralation between Klabin SA and Transmissora Aliana
Assuming the 90 days trading horizon Klabin SA is expected to generate 1.36 times more return on investment than Transmissora Aliana. However, Klabin SA is 1.36 times more volatile than Transmissora Aliana de. It trades about 0.04 of its potential returns per unit of risk. Transmissora Aliana de is currently generating about 0.03 per unit of risk. If you would invest 322.00 in Klabin SA on August 26, 2024 and sell it today you would earn a total of 113.00 from holding Klabin SA or generate 35.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Klabin SA vs. Transmissora Aliana de
Performance |
| Timeline |
| Klabin SA |
| Transmissora Aliana |
Klabin SA and Transmissora Aliana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klabin SA and Transmissora Aliana
The main advantage of trading using opposite Klabin SA and Transmissora Aliana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klabin SA position performs unexpectedly, Transmissora Aliana 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 Transmissora Aliana will offset losses from the drop in Transmissora Aliana's long position.| Klabin SA vs. Klabin SA | Klabin SA vs. Transmissora Aliana de | Klabin SA vs. Itasa Investimentos | Klabin SA vs. Suzano SA |
| Transmissora Aliana vs. Klabin SA | Transmissora Aliana vs. Companhia de Saneamento | Transmissora Aliana vs. Transmissora Aliana de | Transmissora Aliana vs. Itasa Investimentos |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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