Correlation Between Canfor and Goodfellow
Can any of the company-specific risk be diversified away by investing in both Canfor and Goodfellow 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 Goodfellow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canfor and Goodfellow, you can compare the effects of market volatilities on Canfor and Goodfellow 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 Goodfellow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor and Goodfellow.
Diversification Opportunities for Canfor and Goodfellow
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canfor and Goodfellow is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Canfor and Goodfellow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodfellow 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 Goodfellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodfellow has no effect on the direction of Canfor i.e., Canfor and Goodfellow go up and down completely randomly.
Pair Corralation between Canfor and Goodfellow
Assuming the 90 days trading horizon Canfor is expected to generate 1.51 times more return on investment than Goodfellow. However, Canfor is 1.51 times more volatile than Goodfellow. It trades about 0.03 of its potential returns per unit of risk. Goodfellow is currently generating about 0.02 per unit of risk. If you would invest 1,555 in Canfor on September 3, 2024 and sell it today you would earn a total of 172.00 from holding Canfor or generate 11.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canfor vs. Goodfellow
Performance |
| Timeline |
| Canfor |
| Goodfellow |
Canfor and Goodfellow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canfor and Goodfellow
The main advantage of trading using opposite Canfor and Goodfellow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor position performs unexpectedly, Goodfellow 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 Goodfellow will offset losses from the drop in Goodfellow's long position.| Canfor vs. iA Financial | Canfor vs. HPQ Silicon Resources | Canfor vs. Laurentian Bank | Canfor vs. Quisitive Technology Solutions |
| Goodfellow vs. Algoma Central | Goodfellow vs. Taiga Building Products | Goodfellow vs. Conifex Timber | Goodfellow vs. Acadian Timber Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Correlations Find global opportunities by holding instruments from different markets |