Correlation Between Canfor Pulp and Suzano Papel

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

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

Diversification Opportunities for Canfor Pulp and Suzano Papel

-0.13

Correlation Coefficient

Canfor Pulp  Suzano Papel

Good diversification

The 3 months correlation between Canfor and Suzano is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Canfor Pulp Products 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 Canfor Pulp 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 Canfor Pulp Products 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 Canfor Pulp i.e., Canfor Pulp and Suzano Papel go up and down completely randomly.

Pair Corralation between Canfor Pulp and Suzano Papel

Assuming the 90 days horizon Canfor Pulp Products is expected to under-perform the Suzano Papel. In addition to that, Canfor Pulp is 6.08 times more volatile than Suzano Papel e. It trades about -0.07 of its total potential returns per unit of risk. Suzano Papel e is currently generating about -0.22 per unit of volatility. If you would invest  1,093  in Suzano Papel e on October 10, 2024 and sell it today you would lose (75.00) from holding Suzano Papel e or give up 6.86% of portfolio value over 90 days.

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

Canfor Pulp Products  vs.  Suzano Papel e

Canfor Pulp Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canfor Pulp Products has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Suzano Papel e

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Suzano Papel e are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Suzano Papel is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Canfor Pulp and Suzano Papel

The main advantage of trading using opposite Canfor Pulp and Suzano Papel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor Pulp 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 Canfor Pulp Products 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.