Correlation Between Klabin SA and Itasa Investimentos
Can any of the company-specific risk be diversified away by investing in both Klabin SA and Itasa Investimentos 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 Itasa Investimentos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klabin SA and Itasa Investimentos, you can compare the effects of market volatilities on Klabin SA and Itasa Investimentos 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 Itasa Investimentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klabin SA and Itasa Investimentos.
Diversification Opportunities for Klabin SA and Itasa Investimentos
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Klabin and Itasa is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Klabin SA and Itasa Investimentos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itasa Investimentos 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 Itasa Investimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itasa Investimentos has no effect on the direction of Klabin SA i.e., Klabin SA and Itasa Investimentos go up and down completely randomly.
Pair Corralation between Klabin SA and Itasa Investimentos
Assuming the 90 days trading horizon Klabin SA is expected to generate 1.2 times less return on investment than Itasa Investimentos. In addition to that, Klabin SA is 1.52 times more volatile than Itasa Investimentos. It trades about 0.03 of its total potential returns per unit of risk. Itasa Investimentos is currently generating about 0.06 per unit of volatility. If you would invest 718.00 in Itasa Investimentos on August 28, 2024 and sell it today you would earn a total of 300.00 from holding Itasa Investimentos or generate 41.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Klabin SA vs. Itasa Investimentos
Performance |
| Timeline |
| Klabin SA |
| Itasa Investimentos |
Klabin SA and Itasa Investimentos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klabin SA and Itasa Investimentos
The main advantage of trading using opposite Klabin SA and Itasa Investimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klabin SA position performs unexpectedly, Itasa Investimentos 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 Itasa Investimentos will offset losses from the drop in Itasa Investimentos' long position.| Klabin SA vs. Metalurgica Gerdau SA | Klabin SA vs. Companhia Siderrgica Nacional | Klabin SA vs. Companhia Energtica de | Klabin SA vs. Companhia Paranaense de |
| Itasa Investimentos vs. Banco do Estado | Itasa Investimentos vs. Banco do Estado | Itasa Investimentos vs. Banco da Amaznia | Itasa Investimentos vs. BRB Banco de |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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