Correlation Between Suzano Papel and IT Tech

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

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

Diversification Opportunities for Suzano Papel and IT Tech

-0.41

Correlation Coefficient

Suzano Papel  IT Tech

Very good diversification

The 3 months correlation between Suzano and ITP is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Suzano Papel e and IT Tech Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IT Tech Packaging and Suzano Papel 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 Suzano Papel e are associated (or correlated) with IT Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IT Tech Packaging has no effect on the direction of Suzano Papel i.e., Suzano Papel and IT Tech go up and down completely randomly.

Pair Corralation between Suzano Papel and IT Tech

Considering the 90-day investment horizon Suzano Papel e is expected to generate 0.37 times more return on investment than IT Tech. However, Suzano Papel e is 2.73 times less risky than IT Tech. It trades about 0.04 of its potential returns per unit of risk. IT Tech Packaging is currently generating about -0.01 per unit of risk. If you would invest  886.00  in Suzano Papel e on September 12, 2024 and sell it today you would earn a total of  184.00  from holding Suzano Papel e or generate 20.77% return on investment over 90 days.

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

Suzano Papel e  vs.  IT Tech Packaging

Suzano Papel e

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Suzano Papel e are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Suzano Papel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

IT Tech Packaging

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IT Tech Packaging are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IT Tech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Suzano Papel and IT Tech

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

The idea behind Suzano Papel e and IT Tech Packaging 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 CEOs Directory module to screen CEOs from public companies around the world.