Correlation Between Interfor and Conifex Timber
Can any of the company-specific risk be diversified away by investing in both Interfor and Conifex Timber 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 Interfor and Conifex Timber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interfor and Conifex Timber, you can compare the effects of market volatilities on Interfor and Conifex Timber 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 Interfor with a short position of Conifex Timber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interfor and Conifex Timber.
Diversification Opportunities for Interfor and Conifex Timber
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Interfor and Conifex is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Interfor and Conifex Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifex Timber and Interfor 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 Interfor are associated (or correlated) with Conifex Timber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conifex Timber has no effect on the direction of Interfor i.e., Interfor and Conifex Timber go up and down completely randomly.
Pair Corralation between Interfor and Conifex Timber
Assuming the 90 days horizon Interfor is expected to under-perform the Conifex Timber. But the pink sheet apears to be less risky and, when comparing its historical volatility, Interfor is 5.45 times less risky than Conifex Timber. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Conifex Timber is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 119.00 in Conifex Timber on August 24, 2024 and sell it today you would lose (86.00) from holding Conifex Timber or give up 72.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Interfor vs. Conifex Timber
Performance |
| Timeline |
| Interfor |
| Conifex Timber |
Interfor and Conifex Timber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interfor and Conifex Timber
The main advantage of trading using opposite Interfor and Conifex Timber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interfor position performs unexpectedly, Conifex Timber 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 Conifex Timber will offset losses from the drop in Conifex Timber's long position.| Interfor vs. Ascendant Resources | Interfor vs. Cantex Mine Development | Interfor vs. Amarc Resources | Interfor vs. Sterling Metals Corp |
| Conifex Timber vs. Ascendant Resources | Conifex Timber vs. Cantex Mine Development | Conifex Timber vs. Amarc Resources | Conifex Timber vs. Sterling Metals Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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