Correlation Between Canfor and Getty Copper
Can any of the company-specific risk be diversified away by investing in both Canfor and Getty Copper 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 Getty Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canfor and Getty Copper, you can compare the effects of market volatilities on Canfor and Getty Copper 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 Getty Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor and Getty Copper.
Diversification Opportunities for Canfor and Getty Copper
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canfor and Getty is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Canfor and Getty Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Copper 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 Getty Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Copper has no effect on the direction of Canfor i.e., Canfor and Getty Copper go up and down completely randomly.
Pair Corralation between Canfor and Getty Copper
Assuming the 90 days trading horizon Canfor is expected to generate 0.55 times more return on investment than Getty Copper. However, Canfor is 1.83 times less risky than Getty Copper. It trades about -0.07 of its potential returns per unit of risk. Getty Copper is currently generating about -0.21 per unit of risk. If you would invest 1,717 in Canfor on September 13, 2024 and sell it today you would lose (67.00) from holding Canfor or give up 3.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canfor vs. Getty Copper
Performance |
| Timeline |
| Canfor |
| Getty Copper |
Canfor and Getty Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canfor and Getty Copper
The main advantage of trading using opposite Canfor and Getty Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor position performs unexpectedly, Getty Copper 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 Getty Copper will offset losses from the drop in Getty Copper's long position.| Canfor vs. Wilmington Capital Management | Canfor vs. Quisitive Technology Solutions | Canfor vs. NextSource Materials | Canfor vs. Ocumetics Technology Corp |
| Getty Copper vs. Foraco International SA | Getty Copper vs. Geodrill Limited | Getty Copper vs. Major Drilling Group | Getty Copper vs. Bri Chem 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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