Correlation Between Conifex Timber and Svenska Cellulosa
Can any of the company-specific risk be diversified away by investing in both Conifex Timber and Svenska Cellulosa 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 Svenska Cellulosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conifex Timber and Svenska Cellulosa Aktiebolaget, you can compare the effects of market volatilities on Conifex Timber and Svenska Cellulosa 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 Svenska Cellulosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conifex Timber and Svenska Cellulosa.
Diversification Opportunities for Conifex Timber and Svenska Cellulosa
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Conifex and Svenska is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Conifex Timber and Svenska Cellulosa Aktiebolaget in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Cellulosa 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 Svenska Cellulosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Cellulosa has no effect on the direction of Conifex Timber i.e., Conifex Timber and Svenska Cellulosa go up and down completely randomly.
Pair Corralation between Conifex Timber and Svenska Cellulosa
Assuming the 90 days horizon Conifex Timber is expected to generate 37.22 times more return on investment than Svenska Cellulosa. However, Conifex Timber is 37.22 times more volatile than Svenska Cellulosa Aktiebolaget. It trades about 0.13 of its potential returns per unit of risk. Svenska Cellulosa Aktiebolaget is currently generating about 0.0 per unit of risk. If you would invest 6.10 in Conifex Timber on August 28, 2024 and sell it today you would earn a total of 26.90 from holding Conifex Timber or generate 440.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Conifex Timber vs. Svenska Cellulosa Aktiebolaget
Performance |
| Timeline |
| Conifex Timber |
| Svenska Cellulosa |
Conifex Timber and Svenska Cellulosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conifex Timber and Svenska Cellulosa
The main advantage of trading using opposite Conifex Timber and Svenska Cellulosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conifex Timber position performs unexpectedly, Svenska Cellulosa 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 Svenska Cellulosa will offset losses from the drop in Svenska Cellulosa'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 |
| Svenska Cellulosa vs. Interfor | Svenska Cellulosa vs. Western Forest Products | Svenska Cellulosa vs. Stella Jones | Svenska Cellulosa 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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