Correlation Between GreenFirst Forest and Itafos Corp
Can any of the company-specific risk be diversified away by investing in both GreenFirst Forest and Itafos 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 GreenFirst Forest and Itafos Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenFirst Forest Products and Itafos Corp, you can compare the effects of market volatilities on GreenFirst Forest and Itafos 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 GreenFirst Forest with a short position of Itafos Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenFirst Forest and Itafos Corp.
Diversification Opportunities for GreenFirst Forest and Itafos Corp
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GreenFirst and Itafos is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding GreenFirst Forest Products and Itafos Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itafos Corp and GreenFirst Forest 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 GreenFirst Forest Products are associated (or correlated) with Itafos Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itafos Corp has no effect on the direction of GreenFirst Forest i.e., GreenFirst Forest and Itafos Corp go up and down completely randomly.
Pair Corralation between GreenFirst Forest and Itafos Corp
Assuming the 90 days trading horizon GreenFirst Forest Products is expected to under-perform the Itafos Corp. In addition to that, GreenFirst Forest is 1.78 times more volatile than Itafos Corp. It trades about -0.01 of its total potential returns per unit of risk. Itafos Corp is currently generating about 0.04 per unit of volatility. If you would invest 137.00 in Itafos Corp on August 25, 2024 and sell it today you would earn a total of 39.00 from holding Itafos Corp or generate 28.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenFirst Forest Products vs. Itafos Corp
Performance |
| Timeline |
| GreenFirst Forest |
| Itafos Corp |
GreenFirst Forest and Itafos Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenFirst Forest and Itafos Corp
The main advantage of trading using opposite GreenFirst Forest and Itafos Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenFirst Forest position performs unexpectedly, Itafos 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 Itafos Corp will offset losses from the drop in Itafos Corp's long position.| GreenFirst Forest vs. Conifex Timber | GreenFirst Forest vs. Itafos Corp | GreenFirst Forest vs. GreenFirst Forest Products | GreenFirst Forest vs. BluMetric Environmental |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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