Correlation Between Interfor and Ufp Industries
Can any of the company-specific risk be diversified away by investing in both Interfor and Ufp Industries 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 Ufp Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interfor and Ufp Industries, you can compare the effects of market volatilities on Interfor and Ufp Industries 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 Ufp Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interfor and Ufp Industries.
Diversification Opportunities for Interfor and Ufp Industries
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Interfor and Ufp is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Interfor and Ufp Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ufp Industries 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 Ufp Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ufp Industries has no effect on the direction of Interfor i.e., Interfor and Ufp Industries go up and down completely randomly.
Pair Corralation between Interfor and Ufp Industries
Assuming the 90 days horizon Interfor is expected to generate 7.37 times less return on investment than Ufp Industries. In addition to that, Interfor is 1.55 times more volatile than Ufp Industries. It trades about 0.01 of its total potential returns per unit of risk. Ufp Industries is currently generating about 0.07 per unit of volatility. If you would invest 7,898 in Ufp Industries on August 28, 2024 and sell it today you would earn a total of 6,004 from holding Ufp Industries or generate 76.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interfor vs. Ufp Industries
Performance |
| Timeline |
| Interfor |
| Ufp Industries |
Interfor and Ufp Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interfor and Ufp Industries
The main advantage of trading using opposite Interfor and Ufp Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interfor position performs unexpectedly, Ufp Industries 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 Ufp Industries will offset losses from the drop in Ufp Industries' long position.| Interfor vs. Ascendant Resources | Interfor vs. Cantex Mine Development | Interfor vs. Amarc Resources | Interfor vs. Sterling Metals Corp |
| Ufp Industries vs. West Fraser Timber | Ufp Industries vs. Canfor | Ufp Industries vs. Stella Jones | Ufp Industries vs. Simpson Manufacturing |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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