Correlation Between Suzano Papel and Nine Dragons
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
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Suzano and Nine is 0.21. 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 generate 0.6 times more return on investment than Nine Dragons. However, Suzano Papel e is 1.68 times less risky than Nine Dragons. It trades about -0.08 of its potential returns per unit of risk. Nine Dragons Paper is currently generating about -0.33 per unit of risk. If you would invest 1,041 in Suzano Papel e on August 29, 2024 and sell it today you would lose (22.00) from holding Suzano Papel e or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzano Papel e vs. Nine Dragons Paper
Performance |
| Timeline |
| Suzano Papel e |
| Nine Dragons Paper |
Suzano Papel and Nine Dragons Volatility Contrast
Predicted Return Density |
| 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.| Suzano Papel vs. Mercer International | Suzano Papel vs. Klabin Sa A | Suzano Papel vs. UPM Kymmene Oyj | Suzano Papel vs. Mondi PLC ADR |
| Nine Dragons vs. Canfor Pulp Products | Nine Dragons vs. Mondi PLC ADR | Nine Dragons vs. Nine Dragons Paper | Nine Dragons 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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