Correlation Between Canfor and Conifex Timber
Can any of the company-specific risk be diversified away by investing in both Canfor and Conifex Timber 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 Conifex Timber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canfor and Conifex Timber, you can compare the effects of market volatilities on Canfor and Conifex Timber 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 Conifex Timber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor and Conifex Timber.
Diversification Opportunities for Canfor and Conifex Timber
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canfor and Conifex is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Canfor and Conifex Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifex Timber 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 Conifex Timber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conifex Timber has no effect on the direction of Canfor i.e., Canfor and Conifex Timber go up and down completely randomly.
Pair Corralation between Canfor and Conifex Timber
If you would invest 33.00 in Conifex Timber on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Conifex Timber or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canfor vs. Conifex Timber
Performance |
| Timeline |
| Canfor |
| Conifex Timber |
Canfor and Conifex Timber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canfor and Conifex Timber
The main advantage of trading using opposite Canfor and Conifex Timber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor position performs unexpectedly, Conifex Timber 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 Conifex Timber will offset losses from the drop in Conifex Timber's long position.| Canfor vs. Conifex Timber | Canfor vs. GreenFirst Forest Products | Canfor vs. West Fraser Timber | Canfor vs. Ufp Industries |
| Conifex Timber vs. Ascendant Resources | Conifex Timber vs. Cantex Mine Development | Conifex Timber vs. Amarc Resources | Conifex Timber vs. Sterling Metals 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 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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