Correlation Between Stora Enso and Clearwater Paper
Can any of the company-specific risk be diversified away by investing in both Stora Enso and Clearwater Paper 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 Stora Enso and Clearwater Paper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stora Enso Oyj and Clearwater Paper, you can compare the effects of market volatilities on Stora Enso and Clearwater Paper 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 Stora Enso with a short position of Clearwater Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stora Enso and Clearwater Paper.
Diversification Opportunities for Stora Enso and Clearwater Paper
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stora and Clearwater is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Stora Enso Oyj and Clearwater Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearwater Paper and Stora Enso 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 Stora Enso Oyj are associated (or correlated) with Clearwater Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearwater Paper has no effect on the direction of Stora Enso i.e., Stora Enso and Clearwater Paper go up and down completely randomly.
Pair Corralation between Stora Enso and Clearwater Paper
Assuming the 90 days horizon Stora Enso Oyj is expected to under-perform the Clearwater Paper. But the pink sheet apears to be less risky and, when comparing its historical volatility, Stora Enso Oyj is 1.34 times less risky than Clearwater Paper. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Clearwater Paper is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,403 in Clearwater Paper on November 1, 2024 and sell it today you would lose (166.00) from holding Clearwater Paper or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 19.41% |
| Values | Daily Returns |
Stora Enso Oyj vs. Clearwater Paper
Performance |
| Timeline |
| Stora Enso Oyj |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Clearwater Paper |
Stora Enso and Clearwater Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stora Enso and Clearwater Paper
The main advantage of trading using opposite Stora Enso and Clearwater Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stora Enso position performs unexpectedly, Clearwater Paper 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 Clearwater Paper will offset losses from the drop in Clearwater Paper's long position.| Stora Enso vs. Nine Dragons Paper | Stora Enso vs. Canfor Pulp Products | Stora Enso vs. Mondi PLC ADR | Stora Enso vs. Clearwater Paper |
| Clearwater Paper vs. Sylvamo Corp | Clearwater Paper vs. Suzano Papel e | Clearwater Paper vs. Klabin Sa A | Clearwater Paper vs. Mercer International |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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