Correlation Between Conifex Timber and GreenFirst Forest
Can any of the company-specific risk be diversified away by investing in both Conifex Timber and GreenFirst Forest 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 Conifex Timber and GreenFirst Forest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conifex Timber and GreenFirst Forest Products, you can compare the effects of market volatilities on Conifex Timber and GreenFirst Forest 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 Conifex Timber with a short position of GreenFirst Forest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conifex Timber and GreenFirst Forest.
Diversification Opportunities for Conifex Timber and GreenFirst Forest
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Conifex and GreenFirst is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Conifex Timber and GreenFirst Forest Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenFirst Forest and Conifex Timber 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 Conifex Timber are associated (or correlated) with GreenFirst Forest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenFirst Forest has no effect on the direction of Conifex Timber i.e., Conifex Timber and GreenFirst Forest go up and down completely randomly.
Pair Corralation between Conifex Timber and GreenFirst Forest
Assuming the 90 days horizon Conifex Timber is expected to generate 82.03 times less return on investment than GreenFirst Forest. But when comparing it to its historical volatility, Conifex Timber is 10.66 times less risky than GreenFirst Forest. It trades about 0.02 of its potential returns per unit of risk. GreenFirst Forest Products is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,031 in GreenFirst Forest Products on August 28, 2024 and sell it today you would lose (629.00) from holding GreenFirst Forest Products or give up 61.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Conifex Timber vs. GreenFirst Forest Products
Performance |
| Timeline |
| Conifex Timber |
| GreenFirst Forest |
Conifex Timber and GreenFirst Forest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conifex Timber and GreenFirst Forest
The main advantage of trading using opposite Conifex Timber and GreenFirst Forest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conifex Timber position performs unexpectedly, GreenFirst Forest 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 GreenFirst Forest will offset losses from the drop in GreenFirst Forest's long position.| Conifex Timber vs. Ascendant Resources | Conifex Timber vs. Cantex Mine Development | Conifex Timber vs. Amarc Resources | Conifex Timber vs. Sterling Metals Corp |
| GreenFirst Forest vs. Invesco High Income | GreenFirst Forest vs. Blackrock Muniholdings Ny | GreenFirst Forest vs. MFS Investment Grade | GreenFirst Forest vs. Federated Premier Municipal |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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