Correlation Between Canfor Pulp and SPACE
Can any of the company-specific risk be diversified away by investing in both Canfor Pulp and SPACE 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 SPACE 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 SPACE, you can compare the effects of market volatilities on Canfor Pulp and SPACE 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 SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor Pulp and SPACE.
Diversification Opportunities for Canfor Pulp and SPACE
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canfor and SPACE is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Canfor Pulp Products and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE 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 SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Canfor Pulp i.e., Canfor Pulp and SPACE go up and down completely randomly.
Pair Corralation between Canfor Pulp and SPACE
Assuming the 90 days horizon Canfor Pulp Products is expected to under-perform the SPACE. But the pink sheet apears to be less risky and, when comparing its historical volatility, Canfor Pulp Products is 3.45 times less risky than SPACE. The pink sheet trades about -0.28 of its potential returns per unit of risk. The SPACE is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 36.00 in SPACE on September 3, 2024 and sell it today you would earn a total of 23.00 from holding SPACE or generate 63.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Canfor Pulp Products vs. SPACE
Performance |
| Timeline |
| Canfor Pulp Products |
| SPACE |
Canfor Pulp and SPACE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canfor Pulp and SPACE
The main advantage of trading using opposite Canfor Pulp and SPACE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor Pulp position performs unexpectedly, SPACE 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 SPACE will offset losses from the drop in SPACE's 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 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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