Correlation Between Nine Dragons and Suzano SA
Can any of the company-specific risk be diversified away by investing in both Nine Dragons and Suzano SA 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 Nine Dragons and Suzano SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Dragons Paper and Suzano SA, you can compare the effects of market volatilities on Nine Dragons and Suzano SA 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 Nine Dragons with a short position of Suzano SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Dragons and Suzano SA.
Diversification Opportunities for Nine Dragons and Suzano SA
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nine and Suzano is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nine Dragons Paper and Suzano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzano SA and Nine Dragons 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 Nine Dragons Paper are associated (or correlated) with Suzano SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzano SA has no effect on the direction of Nine Dragons i.e., Nine Dragons and Suzano SA go up and down completely randomly.
Pair Corralation between Nine Dragons and Suzano SA
Assuming the 90 days horizon Nine Dragons Paper is expected to under-perform the Suzano SA. In addition to that, Nine Dragons is 1.76 times more volatile than Suzano SA. It trades about -0.09 of its total potential returns per unit of risk. Suzano SA is currently generating about -0.01 per unit of volatility. If you would invest 950.00 in Suzano SA on August 31, 2024 and sell it today you would lose (5.00) from holding Suzano SA or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nine Dragons Paper vs. Suzano SA
Performance |
| Timeline |
| Nine Dragons Paper |
| Suzano SA |
Nine Dragons and Suzano SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Dragons and Suzano SA
The main advantage of trading using opposite Nine Dragons and Suzano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Dragons position performs unexpectedly, Suzano SA 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 Suzano SA will offset losses from the drop in Suzano SA's long position.| Nine Dragons vs. METHODE ELECTRONICS | Nine Dragons vs. TYSON FOODS A | Nine Dragons vs. Nucletron Electronic Aktiengesellschaft | Nine Dragons vs. STMicroelectronics NV |
| Suzano SA vs. Strategic Investments AS | Suzano SA vs. INTER CARS SA | Suzano SA vs. Luckin Coffee | Suzano SA vs. Grupo Carso SAB |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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