Correlation Between Svenska Cellulosa and UFP Industries
Can any of the company-specific risk be diversified away by investing in both Svenska Cellulosa 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 Svenska Cellulosa and UFP Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Svenska Cellulosa Aktiebolaget and UFP Industries, you can compare the effects of market volatilities on Svenska Cellulosa 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 Svenska Cellulosa with a short position of UFP Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Cellulosa and UFP Industries.
Diversification Opportunities for Svenska Cellulosa and UFP Industries
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Svenska and UFP is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Cellulosa Aktiebolaget and UFP Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UFP Industries and Svenska Cellulosa 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 Svenska Cellulosa Aktiebolaget 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 Svenska Cellulosa i.e., Svenska Cellulosa and UFP Industries go up and down completely randomly.
Pair Corralation between Svenska Cellulosa and UFP Industries
Assuming the 90 days horizon Svenska Cellulosa Aktiebolaget is expected to generate 0.73 times more return on investment than UFP Industries. However, Svenska Cellulosa Aktiebolaget is 1.37 times less risky than UFP Industries. It trades about 0.11 of its potential returns per unit of risk. UFP Industries is currently generating about -0.22 per unit of risk. If you would invest 1,289 in Svenska Cellulosa Aktiebolaget on November 28, 2024 and sell it today you would earn a total of 36.00 from holding Svenska Cellulosa Aktiebolaget or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Svenska Cellulosa Aktiebolaget vs. UFP Industries
Performance |
| Timeline |
| Svenska Cellulosa |
| UFP Industries |
Svenska Cellulosa and UFP Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Cellulosa and UFP Industries
The main advantage of trading using opposite Svenska Cellulosa and UFP Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Cellulosa 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.| Svenska Cellulosa vs. United Utilities Group | Svenska Cellulosa vs. G III APPAREL GROUP | Svenska Cellulosa vs. SCANSOURCE | Svenska Cellulosa vs. Urban Outfitters |
| UFP Industries vs. Data3 Limited | UFP Industries vs. Mount Gibson Iron | UFP Industries vs. CALTAGIRONE EDITORE | UFP Industries vs. Alibaba Health Information |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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