Correlation Between CCL Industries and Canfor
Can any of the company-specific risk be diversified away by investing in both CCL Industries and Canfor 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 CCL Industries and Canfor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Canfor, you can compare the effects of market volatilities on CCL Industries and Canfor 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 CCL Industries with a short position of Canfor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Canfor.
Diversification Opportunities for CCL Industries and Canfor
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CCL and Canfor is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Canfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor and CCL Industries 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 CCL Industries are associated (or correlated) with Canfor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor has no effect on the direction of CCL Industries i.e., CCL Industries and Canfor go up and down completely randomly.
Pair Corralation between CCL Industries and Canfor
Assuming the 90 days trading horizon CCL Industries is expected to generate 0.44 times more return on investment than Canfor. However, CCL Industries is 2.25 times less risky than Canfor. It trades about -0.13 of its potential returns per unit of risk. Canfor is currently generating about -0.21 per unit of risk. If you would invest 7,630 in CCL Industries on September 19, 2024 and sell it today you would lose (231.00) from holding CCL Industries or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. Canfor
Performance |
| Timeline |
| CCL Industries |
| Canfor |
CCL Industries and Canfor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Canfor
The main advantage of trading using opposite CCL Industries and Canfor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Canfor 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 Canfor will offset losses from the drop in Canfor's long position.| CCL Industries vs. Cogeco Communications | CCL Industries vs. Quebecor | CCL Industries vs. Finning International | CCL Industries vs. North West |
| Canfor vs. Richelieu Hardware | Canfor vs. CCL Industries | Canfor vs. Stantec | Canfor vs. Gildan Activewear |
Check out your portfolio center.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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