Correlation Between UPM-Kymmene Oyj and Suzano Papel
Can any of the company-specific risk be diversified away by investing in both UPM-Kymmene Oyj and Suzano Papel 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 UPM-Kymmene Oyj and Suzano Papel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UPM Kymmene Oyj and Suzano Papel e, you can compare the effects of market volatilities on UPM-Kymmene Oyj and Suzano Papel 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 UPM-Kymmene Oyj with a short position of Suzano Papel. Check out your portfolio center. Please also check ongoing floating volatility patterns of UPM-Kymmene Oyj and Suzano Papel.
Diversification Opportunities for UPM-Kymmene Oyj and Suzano Papel
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UPM-Kymmene and Suzano is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding UPM Kymmene Oyj and Suzano Papel e in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzano Papel e and UPM-Kymmene Oyj 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 UPM Kymmene Oyj are associated (or correlated) with Suzano Papel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzano Papel e has no effect on the direction of UPM-Kymmene Oyj i.e., UPM-Kymmene Oyj and Suzano Papel go up and down completely randomly.
Pair Corralation between UPM-Kymmene Oyj and Suzano Papel
Assuming the 90 days horizon UPM Kymmene Oyj is expected to under-perform the Suzano Papel. In addition to that, UPM-Kymmene Oyj is 1.69 times more volatile than Suzano Papel e. It trades about -0.02 of its total potential returns per unit of risk. Suzano Papel e is currently generating about 0.01 per unit of volatility. If you would invest 1,030 in Suzano Papel e on September 3, 2024 and sell it today you would lose (6.00) from holding Suzano Papel e or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.93% |
| Values | Daily Returns |
UPM Kymmene Oyj vs. Suzano Papel e
Performance |
| Timeline |
| UPM Kymmene Oyj |
| Suzano Papel e |
UPM-Kymmene Oyj and Suzano Papel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UPM-Kymmene Oyj and Suzano Papel
The main advantage of trading using opposite UPM-Kymmene Oyj and Suzano Papel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UPM-Kymmene Oyj position performs unexpectedly, Suzano Papel 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 Suzano Papel will offset losses from the drop in Suzano Papel's long position.| UPM-Kymmene Oyj vs. Clearwater Paper | UPM-Kymmene Oyj vs. Suzano Papel e | UPM-Kymmene Oyj vs. UPM Kymmene Oyj | UPM-Kymmene Oyj vs. BASF SE NA |
| Suzano Papel vs. Clearwater Paper | Suzano Papel vs. Mercer International | Suzano Papel vs. Klabin Sa A | Suzano Papel vs. Sylvamo Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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