Correlation Between GreenFirst Forest and Simpson Manufacturing
Can any of the company-specific risk be diversified away by investing in both GreenFirst Forest and Simpson Manufacturing 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 Simpson Manufacturing 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 Simpson Manufacturing, you can compare the effects of market volatilities on GreenFirst Forest and Simpson Manufacturing 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 Simpson Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenFirst Forest and Simpson Manufacturing.
Diversification Opportunities for GreenFirst Forest and Simpson Manufacturing
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GreenFirst and Simpson is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding GreenFirst Forest Products and Simpson Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simpson Manufacturing 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 Simpson Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simpson Manufacturing has no effect on the direction of GreenFirst Forest i.e., GreenFirst Forest and Simpson Manufacturing go up and down completely randomly.
Pair Corralation between GreenFirst Forest and Simpson Manufacturing
Assuming the 90 days horizon GreenFirst Forest Products is expected to generate 93.21 times more return on investment than Simpson Manufacturing. However, GreenFirst Forest is 93.21 times more volatile than Simpson Manufacturing. It trades about 0.19 of its potential returns per unit of risk. Simpson Manufacturing is currently generating about 0.09 per unit of risk. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenFirst Forest Products vs. Simpson Manufacturing
Performance |
| Timeline |
| GreenFirst Forest |
| Simpson Manufacturing |
GreenFirst Forest and Simpson Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenFirst Forest and Simpson Manufacturing
The main advantage of trading using opposite GreenFirst Forest and Simpson Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenFirst Forest position performs unexpectedly, Simpson Manufacturing 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 Simpson Manufacturing will offset losses from the drop in Simpson Manufacturing's long position.| GreenFirst Forest vs. Invesco High Income | GreenFirst Forest vs. Blackrock Muniholdings Ny | GreenFirst Forest vs. MFS Investment Grade | GreenFirst Forest vs. Federated Premier Municipal |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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