Correlation Between Nine Dragons and Sappi
Can any of the company-specific risk be diversified away by investing in both Nine Dragons and Sappi 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 Sappi 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 Sappi Ltd ADR, you can compare the effects of market volatilities on Nine Dragons and Sappi 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 Sappi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Dragons and Sappi.
Diversification Opportunities for Nine Dragons and Sappi
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nine and Sappi is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nine Dragons Paper and Sappi Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sappi Ltd ADR 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 Sappi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sappi Ltd ADR has no effect on the direction of Nine Dragons i.e., Nine Dragons and Sappi go up and down completely randomly.
Pair Corralation between Nine Dragons and Sappi
If you would invest 690.00 in Nine Dragons Paper on August 25, 2024 and sell it today you would earn a total of 88.00 from holding Nine Dragons Paper or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Nine Dragons Paper vs. Sappi Ltd ADR
Performance |
| Timeline |
| Nine Dragons Paper |
| Sappi Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nine Dragons and Sappi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Dragons and Sappi
The main advantage of trading using opposite Nine Dragons and Sappi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Dragons position performs unexpectedly, Sappi 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 Sappi will offset losses from the drop in Sappi'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 |
| Sappi vs. Nine Dragons Paper | Sappi vs. Nine Dragons Paper | Sappi vs. Mondi PLC ADR | Sappi vs. Klabin Sa A |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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