Correlation Between Canfor and Ufp Industries
Can any of the company-specific risk be diversified away by investing in both Canfor and Ufp Industries 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 Ufp Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canfor and Ufp Industries, you can compare the effects of market volatilities on Canfor and Ufp Industries 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 Ufp Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor and Ufp Industries.
Diversification Opportunities for Canfor and Ufp Industries
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Canfor and Ufp is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Canfor and Ufp Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ufp Industries 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 Ufp Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ufp Industries has no effect on the direction of Canfor i.e., Canfor and Ufp Industries go up and down completely randomly.
Pair Corralation between Canfor and Ufp Industries
Assuming the 90 days horizon Canfor is expected to under-perform the Ufp Industries. In addition to that, Canfor is 1.31 times more volatile than Ufp Industries. It trades about -0.01 of its total potential returns per unit of risk. Ufp Industries is currently generating about 0.17 per unit of volatility. If you would invest 11,265 in Ufp Industries on November 1, 2024 and sell it today you would earn a total of 567.00 from holding Ufp Industries or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canfor vs. Ufp Industries
Performance |
| Timeline |
| Canfor |
| Ufp Industries |
Canfor and Ufp Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canfor and Ufp Industries
The main advantage of trading using opposite Canfor and Ufp Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor position performs unexpectedly, Ufp Industries 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 Ufp Industries will offset losses from the drop in Ufp Industries' long position.| Canfor vs. Conifex Timber | Canfor vs. GreenFirst Forest Products | Canfor vs. West Fraser Timber | Canfor vs. Ufp Industries |
| Ufp Industries vs. West Fraser Timber | Ufp Industries vs. Canfor | Ufp Industries vs. Stella Jones | Ufp Industries vs. Simpson Manufacturing |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |