Correlation Between Klabin SA and Suzano SA

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

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

Diversification Opportunities for Klabin SA and Suzano SA

0.86

Correlation Coefficient

Klabin SA  Suzano SA

Very poor diversification

The 3 months correlation between Klabin and Suzano is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Klabin SA and Suzano SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzano SA and Klabin 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 Klabin SA 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 Klabin SA i.e., Klabin SA and Suzano SA go up and down completely randomly.

Pair Corralation between Klabin SA and Suzano SA

Assuming the 90 days trading horizon Klabin SA is expected to under-perform the Suzano SA. In addition to that, Klabin SA is 1.01 times more volatile than Suzano SA. It trades about -0.24 of its total potential returns per unit of risk. Suzano SA is currently generating about -0.22 per unit of volatility. If you would invest  6,240  in Suzano SA on December 31, 2024 and sell it today you would lose (920.00) from holding Suzano SA or give up 14.74% of portfolio value over 90 days.

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

Klabin SA  vs.  Suzano SA

Klabin SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Klabin SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Suzano SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Suzano SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Klabin SA and Suzano SA

The main advantage of trading using opposite Klabin SA and Suzano SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klabin SA 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 Klabin SA 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.