Correlation Between Canfor Pulp and SCOR PK
Can any of the company-specific risk be diversified away by investing in both Canfor Pulp and SCOR PK 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 SCOR PK 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 SCOR PK, you can compare the effects of market volatilities on Canfor Pulp and SCOR PK 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 SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor Pulp and SCOR PK.
Diversification Opportunities for Canfor Pulp and SCOR PK
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canfor and SCOR is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Canfor Pulp Products and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK 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 SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of Canfor Pulp i.e., Canfor Pulp and SCOR PK go up and down completely randomly.
Pair Corralation between Canfor Pulp and SCOR PK
Assuming the 90 days horizon Canfor Pulp Products is expected to under-perform the SCOR PK. But the pink sheet apears to be less risky and, when comparing its historical volatility, Canfor Pulp Products is 2.1 times less risky than SCOR PK. The pink sheet trades about -0.28 of its potential returns per unit of risk. The SCOR PK is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 214.00 in SCOR PK on September 3, 2024 and sell it today you would earn a total of 34.00 from holding SCOR PK or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canfor Pulp Products vs. SCOR PK
Performance |
| Timeline |
| Canfor Pulp Products |
| SCOR PK |
Canfor Pulp and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canfor Pulp and SCOR PK
The main advantage of trading using opposite Canfor Pulp and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor Pulp position performs unexpectedly, SCOR PK 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 SCOR PK will offset losses from the drop in SCOR PK'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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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