Correlation Between Conifex Timber and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Conifex Timber and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conifex Timber and Dow Jones Industrial, you can compare the effects of market volatilities on Conifex Timber and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conifex Timber and Dow Jones.
Diversification Opportunities for Conifex Timber and Dow Jones
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Conifex and Dow is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Conifex Timber and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Conifex Timber i.e., Conifex Timber and Dow Jones go up and down completely randomly.
Pair Corralation between Conifex Timber and Dow Jones
Assuming the 90 days trading horizon Conifex Timber is expected to under-perform the Dow Jones. In addition to that, Conifex Timber is 8.04 times more volatile than Dow Jones Industrial. It trades about -0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of volatility. If you would invest 3,292,896 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 1,136,755 from holding Dow Jones Industrial or generate 34.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Conifex Timber vs. Dow Jones Industrial
Performance |
| Timeline |
Conifex Timber and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Conifex Timber
Pair trading matchups for Conifex Timber
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Conifex Timber and Dow Jones
The main advantage of trading using opposite Conifex Timber and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conifex Timber position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Conifex Timber vs. Western Forest Products | Conifex Timber vs. Interfor Corp | Conifex Timber vs. Canfor Pulp Products | Conifex Timber vs. Canfor |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| CEOs Directory Screen CEOs from public companies around the world |