Correlation Between Canfor and Converge Technology
Can any of the company-specific risk be diversified away by investing in both Canfor and Converge Technology 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 Canfor and Converge Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canfor and Converge Technology Solutions, you can compare the effects of market volatilities on Canfor and Converge Technology 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 Canfor with a short position of Converge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor and Converge Technology.
Diversification Opportunities for Canfor and Converge Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canfor and Converge is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Canfor and Converge Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Technology and Canfor 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 Canfor are associated (or correlated) with Converge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Technology has no effect on the direction of Canfor i.e., Canfor and Converge Technology go up and down completely randomly.
Pair Corralation between Canfor and Converge Technology
Assuming the 90 days trading horizon Canfor is expected to under-perform the Converge Technology. But the stock apears to be less risky and, when comparing its historical volatility, Canfor is 1.56 times less risky than Converge Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Converge Technology Solutions is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 508.00 in Converge Technology Solutions on October 14, 2024 and sell it today you would lose (157.00) from holding Converge Technology Solutions or give up 30.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canfor vs. Converge Technology Solutions
Performance |
| Timeline |
| Canfor |
| Converge Technology |
Canfor and Converge Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canfor and Converge Technology
The main advantage of trading using opposite Canfor and Converge Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor position performs unexpectedly, Converge Technology 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 Converge Technology will offset losses from the drop in Converge Technology's long position.| Canfor vs. Canadian Utilities Limited | Canfor vs. Bausch Health Companies | Canfor vs. Constellation Software | Canfor vs. TUT Fitness Group |
| Converge Technology vs. Dye Durham | Converge Technology vs. Docebo Inc | Converge Technology vs. Topicus | Converge Technology vs. goeasy |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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