Correlation Between Nine Dragons and Klabin Sa
Can any of the company-specific risk be diversified away by investing in both Nine Dragons and Klabin 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 Klabin 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 Klabin Sa A, you can compare the effects of market volatilities on Nine Dragons and Klabin 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 Klabin Sa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Dragons and Klabin Sa.
Diversification Opportunities for Nine Dragons and Klabin Sa
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nine and Klabin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nine Dragons Paper and Klabin Sa A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klabin Sa A 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 Klabin Sa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klabin Sa A has no effect on the direction of Nine Dragons i.e., Nine Dragons and Klabin Sa go up and down completely randomly.
Pair Corralation between Nine Dragons and Klabin Sa
Assuming the 90 days horizon Nine Dragons Paper is expected to under-perform the Klabin Sa. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nine Dragons Paper is 2.08 times less risky than Klabin Sa. The pink sheet trades about -0.33 of its potential returns per unit of risk. The Klabin Sa A is currently generating about 0.05 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Dragons Paper vs. Klabin Sa A
Performance |
| Timeline |
| Nine Dragons Paper |
| Klabin Sa A |
Nine Dragons and Klabin Sa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Dragons and Klabin Sa
The main advantage of trading using opposite Nine Dragons and Klabin Sa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Dragons position performs unexpectedly, Klabin 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 Klabin Sa will offset losses from the drop in Klabin Sa's long position.| Nine Dragons vs. Canfor Pulp Products | Nine Dragons vs. Mondi PLC ADR | Nine Dragons vs. Nine Dragons Paper | Nine Dragons vs. Klabin Sa A |
| Klabin Sa vs. Mondi PLC ADR | Klabin Sa vs. Suzano Papel e | Klabin Sa vs. Nine Dragons Paper | Klabin Sa vs. Nine Dragons Paper |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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