Correlation Between Canfor Pulp and BillerudKorsnäs
Can any of the company-specific risk be diversified away by investing in both Canfor Pulp and BillerudKorsnäs 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 Pulp and BillerudKorsnäs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canfor Pulp Products and BillerudKorsns AB, you can compare the effects of market volatilities on Canfor Pulp and BillerudKorsnäs 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 Pulp with a short position of BillerudKorsnäs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor Pulp and BillerudKorsnäs.
Diversification Opportunities for Canfor Pulp and BillerudKorsnäs
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canfor and BillerudKorsnäs is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Canfor Pulp Products and BillerudKorsns AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BillerudKorsns AB and Canfor Pulp 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 Pulp Products are associated (or correlated) with BillerudKorsnäs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BillerudKorsns AB has no effect on the direction of Canfor Pulp i.e., Canfor Pulp and BillerudKorsnäs go up and down completely randomly.
Pair Corralation between Canfor Pulp and BillerudKorsnäs
Assuming the 90 days horizon Canfor Pulp Products is expected to generate 8.23 times more return on investment than BillerudKorsnäs. However, Canfor Pulp is 8.23 times more volatile than BillerudKorsns AB. It trades about 0.14 of its potential returns per unit of risk. BillerudKorsns AB is currently generating about 0.27 per unit of risk. If you would invest 51.00 in Canfor Pulp Products on October 25, 2024 and sell it today you would earn a total of 7.00 from holding Canfor Pulp Products or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Canfor Pulp Products vs. BillerudKorsns AB
Performance |
| Timeline |
| Canfor Pulp Products |
| BillerudKorsns AB |
Canfor Pulp and BillerudKorsnäs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canfor Pulp and BillerudKorsnäs
The main advantage of trading using opposite Canfor Pulp and BillerudKorsnäs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor Pulp position performs unexpectedly, BillerudKorsnäs 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 BillerudKorsnäs will offset losses from the drop in BillerudKorsnäs' long position.| Canfor Pulp vs. Nine Dragons Paper | Canfor Pulp vs. Nine Dragons Paper | Canfor Pulp vs. Mondi PLC ADR | Canfor Pulp vs. Klabin Sa A |
| BillerudKorsnäs vs. Oji Holdings Corp | BillerudKorsnäs vs. Nine Dragons Paper | BillerudKorsnäs vs. Nine Dragons Paper | BillerudKorsnäs vs. Canfor Pulp Products |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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