Correlation Between GreenFirst Forest and Stella Jones
Can any of the company-specific risk be diversified away by investing in both GreenFirst Forest and Stella Jones 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 Stella Jones 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 Stella Jones, you can compare the effects of market volatilities on GreenFirst Forest and Stella Jones 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 Stella Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenFirst Forest and Stella Jones.
Diversification Opportunities for GreenFirst Forest and Stella Jones
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between GreenFirst and Stella is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding GreenFirst Forest Products and Stella Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stella Jones 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 Stella Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stella Jones has no effect on the direction of GreenFirst Forest i.e., GreenFirst Forest and Stella Jones go up and down completely randomly.
Pair Corralation between GreenFirst Forest and Stella Jones
Assuming the 90 days horizon GreenFirst Forest Products is expected to under-perform the Stella Jones. But the pink sheet apears to be less risky and, when comparing its historical volatility, GreenFirst Forest Products is 1.3 times less risky than Stella Jones. The pink sheet trades about -0.45 of its potential returns per unit of risk. The Stella Jones is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 6,233 in Stella Jones on August 28, 2024 and sell it today you would lose (1,113) from holding Stella Jones or give up 17.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenFirst Forest Products vs. Stella Jones
Performance |
| Timeline |
| GreenFirst Forest |
| Stella Jones |
GreenFirst Forest and Stella Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenFirst Forest and Stella Jones
The main advantage of trading using opposite GreenFirst Forest and Stella Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenFirst Forest position performs unexpectedly, Stella Jones 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 Stella Jones will offset losses from the drop in Stella Jones' 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 |
| Stella Jones vs. Canfor | Stella Jones vs. West Fraser Timber | Stella Jones vs. Interfor | Stella Jones vs. Svenska Cellulosa Aktiebolaget |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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