Correlation Between Suzano SA and MAHLE Metal
Can any of the company-specific risk be diversified away by investing in both Suzano SA and MAHLE Metal 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 MAHLE Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suzano SA and MAHLE Metal Leve, you can compare the effects of market volatilities on Suzano SA and MAHLE Metal 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 MAHLE Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzano SA and MAHLE Metal.
Diversification Opportunities for Suzano SA and MAHLE Metal
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Suzano and MAHLE is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Suzano SA and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve 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 MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of Suzano SA i.e., Suzano SA and MAHLE Metal go up and down completely randomly.
Pair Corralation between Suzano SA and MAHLE Metal
Assuming the 90 days trading horizon Suzano SA is expected to generate 0.53 times more return on investment than MAHLE Metal. However, Suzano SA is 1.88 times less risky than MAHLE Metal. It trades about 0.05 of its potential returns per unit of risk. MAHLE Metal Leve is currently generating about -0.17 per unit of risk. If you would invest 5,934 in Suzano SA on August 27, 2024 and sell it today you would earn a total of 56.00 from holding Suzano SA or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suzano SA vs. MAHLE Metal Leve
Performance |
| Timeline |
| Suzano SA |
| MAHLE Metal Leve |
Suzano SA and MAHLE Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzano SA and MAHLE Metal
The main advantage of trading using opposite Suzano SA and MAHLE Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzano SA position performs unexpectedly, MAHLE Metal 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 MAHLE Metal will offset losses from the drop in MAHLE Metal's long position.The idea behind Suzano SA and MAHLE Metal Leve 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.| MAHLE Metal vs. Baidu Inc | MAHLE Metal vs. Deutsche Bank Aktiengesellschaft | MAHLE Metal vs. HSBC Holdings plc | MAHLE Metal vs. The Bank of |
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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