Correlation Between Reyna Silver and Canfor
Can any of the company-specific risk be diversified away by investing in both Reyna Silver and Canfor 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 Reyna Silver and Canfor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reyna Silver Corp and Canfor, you can compare the effects of market volatilities on Reyna Silver and Canfor 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 Reyna Silver with a short position of Canfor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reyna Silver and Canfor.
Diversification Opportunities for Reyna Silver and Canfor
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Reyna and Canfor is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Reyna Silver Corp and Canfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor and Reyna Silver 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 Reyna Silver Corp are associated (or correlated) with Canfor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor has no effect on the direction of Reyna Silver i.e., Reyna Silver and Canfor go up and down completely randomly.
Pair Corralation between Reyna Silver and Canfor
Assuming the 90 days horizon Reyna Silver Corp is expected to under-perform the Canfor. In addition to that, Reyna Silver is 2.31 times more volatile than Canfor. It trades about -0.03 of its total potential returns per unit of risk. Canfor is currently generating about -0.02 per unit of volatility. If you would invest 1,531 in Canfor on November 27, 2024 and sell it today you would lose (474.00) from holding Canfor or give up 30.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reyna Silver Corp vs. Canfor
Performance |
| Timeline |
| Reyna Silver Corp |
| Canfor |
Reyna Silver and Canfor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reyna Silver and Canfor
The main advantage of trading using opposite Reyna Silver and Canfor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reyna Silver position performs unexpectedly, Canfor 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 Canfor will offset losses from the drop in Canfor's long position.| Reyna Silver vs. Bald Eagle Gold | Reyna Silver vs. Arizona Silver Exploration | Reyna Silver vs. Silver One Resources | Reyna Silver vs. Discovery Metals Corp |
| Canfor vs. Conifex Timber | Canfor vs. GreenFirst Forest Products | Canfor vs. West Fraser Timber | Canfor vs. Ufp Industries |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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