Correlation Between Suzano Papel and Nine Dragons

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Can any of the company-specific risk be diversified away by investing in both Suzano Papel and Nine Dragons 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 Papel and Nine Dragons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suzano Papel e and Nine Dragons Paper, you can compare the effects of market volatilities on Suzano Papel and Nine Dragons 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 Papel with a short position of Nine Dragons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzano Papel and Nine Dragons.

Diversification Opportunities for Suzano Papel and Nine Dragons

SuzanoNineDiversified AwaySuzanoNineDiversified Away100%
0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Suzano and Nine is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Suzano Papel e and Nine Dragons Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Dragons Paper and Suzano Papel 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 Papel e are associated (or correlated) with Nine Dragons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Dragons Paper has no effect on the direction of Suzano Papel i.e., Suzano Papel and Nine Dragons go up and down completely randomly.

Pair Corralation between Suzano Papel and Nine Dragons

Considering the 90-day investment horizon Suzano Papel e is expected to under-perform the Nine Dragons. But the stock apears to be less risky and, when comparing its historical volatility, Suzano Papel e is 1.95 times less risky than Nine Dragons. The stock trades about -0.01 of its potential returns per unit of risk. The Nine Dragons Paper is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  818.00  in Nine Dragons Paper on November 26, 2024 and sell it today you would earn a total of  24.00  from holding Nine Dragons Paper or generate 2.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy65.0%
ValuesDaily Returns

Suzano Papel e  vs.  Nine Dragons Paper

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 01020304050
JavaScript chart by amCharts 3.21.15SUZ NDGPY
       Timeline  
Suzano Papel e 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Suzano Papel e has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Suzano Papel is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9.69.81010.210.410.610.811
Nine Dragons Paper 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nine Dragons Paper are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Nine Dragons may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15NovDecJanFebDecJanFeb88.599.51010.51111.5

Suzano Papel and Nine Dragons Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.39-1.81-1.23-0.65-0.06950.51.081.662.242.82 0.050.100.15
JavaScript chart by amCharts 3.21.15SUZ NDGPY
       Returns  

Pair Trading with Suzano Papel and Nine Dragons

The main advantage of trading using opposite Suzano Papel and Nine Dragons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzano Papel position performs unexpectedly, Nine Dragons 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 Nine Dragons will offset losses from the drop in Nine Dragons' long position.
The idea behind Suzano Papel e and Nine Dragons Paper pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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