Correlation Between Suzano SA and Columbia Sportswear
Can any of the company-specific risk be diversified away by investing in both Suzano SA and Columbia Sportswear 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 Suzano SA and Columbia Sportswear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suzano SA and Columbia Sportswear, you can compare the effects of market volatilities on Suzano SA and Columbia Sportswear 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 Suzano SA with a short position of Columbia Sportswear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzano SA and Columbia Sportswear.
Diversification Opportunities for Suzano SA and Columbia Sportswear
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Suzano and Columbia is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Suzano SA and Columbia Sportswear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Sportswear and Suzano 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 Suzano SA are associated (or correlated) with Columbia Sportswear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Sportswear has no effect on the direction of Suzano SA i.e., Suzano SA and Columbia Sportswear go up and down completely randomly.
Pair Corralation between Suzano SA and Columbia Sportswear
Assuming the 90 days trading horizon Suzano SA is expected to generate 1.19 times more return on investment than Columbia Sportswear. However, Suzano SA is 1.19 times more volatile than Columbia Sportswear. It trades about 0.08 of its potential returns per unit of risk. Columbia Sportswear is currently generating about 0.04 per unit of risk. If you would invest 800.00 in Suzano SA on September 3, 2024 and sell it today you would earn a total of 170.00 from holding Suzano SA or generate 21.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzano SA vs. Columbia Sportswear
Performance |
| Timeline |
| Suzano SA |
| Columbia Sportswear |
Suzano SA and Columbia Sportswear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzano SA and Columbia Sportswear
The main advantage of trading using opposite Suzano SA and Columbia Sportswear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzano SA position performs unexpectedly, Columbia Sportswear 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 Columbia Sportswear will offset losses from the drop in Columbia Sportswear's long position.| Suzano SA vs. UPM Kymmene Oyj | Suzano SA vs. Stora Enso Oyj | Suzano SA vs. Suzano SA | Suzano 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 Stocks Directory module to find actively traded stocks across global markets.
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