Correlation Between Nine Dragons and Suzano Papel

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

By analyzing existing cross correlation between Nine Dragons Paper and Suzano Papel e, you can compare the effects of market volatilities on Nine Dragons 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 Nine Dragons with a short position of Suzano Papel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Dragons and Suzano Papel.

Diversification Opportunities for Nine Dragons and Suzano Papel

0.21

Correlation Coefficient

Nine Dragons  Suzano Papel

Modest diversification

The 3 months correlation between Nine and Suzano is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nine Dragons Paper 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 Nine Dragons 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 Nine Dragons Paper 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 Nine Dragons i.e., Nine Dragons and Suzano Papel go up and down completely randomly.

Pair Corralation between Nine Dragons and Suzano Papel

Assuming the 90 days horizon Nine Dragons Paper is expected to generate 3.6 times more return on investment than Suzano Papel. However, Nine Dragons is 3.6 times more volatile than Suzano Papel e. It trades about 0.03 of its potential returns per unit of risk. Suzano Papel e is currently generating about 0.07 per unit of risk. If you would invest  767.00  in Nine Dragons Paper on September 5, 2024 and sell it today you would earn a total of  11.00  from holding Nine Dragons Paper or generate 1.43% return on investment over 90 days.

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

Nine Dragons Paper  vs.  Suzano Papel e

Nine Dragons Paper

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nine Dragons Paper are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nine Dragons may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Suzano Papel e

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Suzano Papel e are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Suzano Papel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nine Dragons and Suzano Papel

The main advantage of trading using opposite Nine Dragons and Suzano Papel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Dragons 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.

The idea behind Nine Dragons Paper and Suzano Papel e 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.