Correlation Between Kinea Rendimentos and Suzano SA

Can any of the company-specific risk be diversified away by investing in both Kinea Rendimentos and Suzano SA 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 Kinea Rendimentos and Suzano SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinea Rendimentos Imobilirios and Suzano SA, you can compare the effects of market volatilities on Kinea Rendimentos and Suzano SA 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 Kinea Rendimentos with a short position of Suzano SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinea Rendimentos and Suzano SA.

Diversification Opportunities for Kinea Rendimentos and Suzano SA

-0.64

Correlation Coefficient

Kinea Rendimentos  Suzano SA

Excellent diversification

The 3 months correlation between Kinea and Suzano is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kinea Rendimentos Imobilirios and Suzano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzano SA and Kinea Rendimentos 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 Kinea Rendimentos Imobilirios are associated (or correlated) with Suzano SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzano SA has no effect on the direction of Kinea Rendimentos i.e., Kinea Rendimentos and Suzano SA go up and down completely randomly.

Pair Corralation between Kinea Rendimentos and Suzano SA

Assuming the 90 days trading horizon Kinea Rendimentos Imobilirios is expected to under-perform the Suzano SA. But the fund apears to be less risky and, when comparing its historical volatility, Kinea Rendimentos Imobilirios is 1.8 times less risky than Suzano SA. The fund trades about -0.11 of its potential returns per unit of risk. The Suzano SA is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  5,087  in Suzano SA on September 19, 2024 and sell it today you would earn a total of  1,300  from holding Suzano SA or generate 25.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Kinea Rendimentos Imobilirios  vs.  Suzano SA

Kinea Rendimentos

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinea Rendimentos Imobilirios has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong fundamental indicators, Kinea Rendimentos is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Suzano SA

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Suzano SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Suzano SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinea Rendimentos and Suzano SA

The main advantage of trading using opposite Kinea Rendimentos and Suzano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinea Rendimentos position performs unexpectedly, Suzano SA 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 SA will offset losses from the drop in Suzano SA's long position.

The idea behind Kinea Rendimentos Imobilirios and Suzano SA 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.