Correlation Between Suzano SA and KHD Humboldt
Can any of the company-specific risk be diversified away by investing in both Suzano SA and KHD Humboldt 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 KHD Humboldt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suzano SA and KHD Humboldt Wedag, you can compare the effects of market volatilities on Suzano SA and KHD Humboldt 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 KHD Humboldt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzano SA and KHD Humboldt.
Diversification Opportunities for Suzano SA and KHD Humboldt
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Suzano and KHD is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Suzano SA and KHD Humboldt Wedag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KHD Humboldt Wedag 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 KHD Humboldt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KHD Humboldt Wedag has no effect on the direction of Suzano SA i.e., Suzano SA and KHD Humboldt go up and down completely randomly.
Pair Corralation between Suzano SA and KHD Humboldt
Assuming the 90 days trading horizon Suzano SA is expected to generate 0.8 times more return on investment than KHD Humboldt. However, Suzano SA is 1.25 times less risky than KHD Humboldt. It trades about 0.24 of its potential returns per unit of risk. KHD Humboldt Wedag is currently generating about 0.14 per unit of risk. If you would invest 925.00 in Suzano SA on August 24, 2024 and sell it today you would earn a total of 60.00 from holding Suzano SA or generate 6.49% 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. KHD Humboldt Wedag
Performance |
| Timeline |
| Suzano SA |
| KHD Humboldt Wedag |
Suzano SA and KHD Humboldt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzano SA and KHD Humboldt
The main advantage of trading using opposite Suzano SA and KHD Humboldt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzano SA position performs unexpectedly, KHD Humboldt 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 KHD Humboldt will offset losses from the drop in KHD Humboldt's long position.| Suzano SA vs. Superior Plus Corp | Suzano SA vs. Origin Agritech | Suzano SA vs. Identiv | Suzano SA vs. INTUITIVE SURGICAL |
| KHD Humboldt vs. NTG Nordic Transport | KHD Humboldt vs. TEXAS ROADHOUSE | KHD Humboldt vs. Nishi Nippon Railroad Co | KHD Humboldt vs. CVS Health |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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