Correlation Between Stella Jones and Conifex Timber
Can any of the company-specific risk be diversified away by investing in both Stella Jones 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 Stella Jones and Conifex Timber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stella Jones and Conifex Timber, you can compare the effects of market volatilities on Stella Jones 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 Stella Jones with a short position of Conifex Timber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Conifex Timber.
Diversification Opportunities for Stella Jones and Conifex Timber
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stella and Conifex is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and Conifex Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifex Timber and Stella Jones 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 Stella Jones 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 Stella Jones i.e., Stella Jones and Conifex Timber go up and down completely randomly.
Pair Corralation between Stella Jones and Conifex Timber
Assuming the 90 days horizon Stella Jones is expected to generate 3.72 times less return on investment than Conifex Timber. But when comparing it to its historical volatility, Stella Jones is 7.68 times less risky than Conifex Timber. It trades about 0.05 of its potential returns per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 83.43% |
| Values | Daily Returns |
Stella Jones vs. Conifex Timber
Performance |
| Timeline |
| Stella Jones |
| Conifex Timber |
Stella Jones and Conifex Timber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stella Jones and Conifex Timber
The main advantage of trading using opposite Stella Jones and Conifex Timber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones 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.| Stella Jones vs. Canfor | Stella Jones vs. West Fraser Timber | Stella Jones vs. Interfor | Stella Jones vs. Svenska Cellulosa Aktiebolaget |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |