Correlation Between Clearwater Paper and Magnera Corp
Can any of the company-specific risk be diversified away by investing in both Clearwater Paper and Magnera Corp 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 Clearwater Paper and Magnera Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearwater Paper and Magnera Corp placeholder, you can compare the effects of market volatilities on Clearwater Paper and Magnera Corp 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 Clearwater Paper with a short position of Magnera Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Paper and Magnera Corp.
Diversification Opportunities for Clearwater Paper and Magnera Corp
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Clearwater and Magnera is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Paper and Magnera Corp placeholder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnera Corp placeholder and Clearwater Paper 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 Clearwater Paper are associated (or correlated) with Magnera Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnera Corp placeholder has no effect on the direction of Clearwater Paper i.e., Clearwater Paper and Magnera Corp go up and down completely randomly.
Pair Corralation between Clearwater Paper and Magnera Corp
Considering the 90-day investment horizon Clearwater Paper is expected to under-perform the Magnera Corp. But the stock apears to be less risky and, when comparing its historical volatility, Clearwater Paper is 2.47 times less risky than Magnera Corp. The stock trades about -0.02 of its potential returns per unit of risk. The Magnera Corp placeholder is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,316 in Magnera Corp placeholder on September 3, 2024 and sell it today you would lose (2,268) from holding Magnera Corp placeholder or give up 52.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearwater Paper vs. Magnera Corp placeholder
Performance |
| Timeline |
| Clearwater Paper |
| Magnera Corp placeholder |
Clearwater Paper and Magnera Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearwater Paper and Magnera Corp
The main advantage of trading using opposite Clearwater Paper and Magnera Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Paper position performs unexpectedly, Magnera Corp 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 Magnera Corp will offset losses from the drop in Magnera Corp's long position.| Clearwater Paper vs. Sylvamo Corp | Clearwater Paper vs. Suzano Papel e | Clearwater Paper vs. Klabin Sa A | Clearwater Paper vs. Mercer International |
| Magnera Corp vs. Clearwater Paper | Magnera Corp vs. IT Tech Packaging | Magnera Corp vs. Suzano Papel e | Magnera Corp vs. Mercer International |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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