Correlation Between Conifex Timber and Acadian Timber
Can any of the company-specific risk be diversified away by investing in both Conifex Timber and Acadian Timber 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 Conifex Timber and Acadian Timber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conifex Timber and Acadian Timber Corp, you can compare the effects of market volatilities on Conifex Timber and Acadian Timber 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 Conifex Timber with a short position of Acadian Timber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conifex Timber and Acadian Timber.
Diversification Opportunities for Conifex Timber and Acadian Timber
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Conifex and Acadian is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Conifex Timber and Acadian Timber Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Timber Corp and Conifex Timber 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 Conifex Timber are associated (or correlated) with Acadian Timber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Timber Corp has no effect on the direction of Conifex Timber i.e., Conifex Timber and Acadian Timber go up and down completely randomly.
Pair Corralation between Conifex Timber and Acadian Timber
Assuming the 90 days trading horizon Conifex Timber is expected to under-perform the Acadian Timber. In addition to that, Conifex Timber is 5.54 times more volatile than Acadian Timber Corp. It trades about -0.16 of its total potential returns per unit of risk. Acadian Timber Corp is currently generating about -0.19 per unit of volatility. If you would invest 1,845 in Acadian Timber Corp on August 28, 2024 and sell it today you would lose (87.00) from holding Acadian Timber Corp or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Conifex Timber vs. Acadian Timber Corp
Performance |
| Timeline |
| Conifex Timber |
| Acadian Timber Corp |
Conifex Timber and Acadian Timber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conifex Timber and Acadian Timber
The main advantage of trading using opposite Conifex Timber and Acadian Timber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conifex Timber position performs unexpectedly, Acadian Timber 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 Acadian Timber will offset losses from the drop in Acadian Timber's long position.| Conifex Timber vs. First Majestic Silver | Conifex Timber vs. Ivanhoe Energy | Conifex Timber vs. Orezone Gold Corp | Conifex Timber vs. Faraday Copper Corp |
| Acadian Timber vs. Altair Resources | Acadian Timber vs. Diamond Estates Wines | Acadian Timber vs. Partners Value Investments | Acadian Timber vs. Highwood Asset Management |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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