Correlation Between Stella Jones and Interfor
Can any of the company-specific risk be diversified away by investing in both Stella Jones and Interfor 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 Interfor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stella Jones and Interfor, you can compare the effects of market volatilities on Stella Jones and Interfor 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 Interfor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Interfor.
Diversification Opportunities for Stella Jones and Interfor
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stella and Interfor is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and Interfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interfor 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 Interfor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interfor has no effect on the direction of Stella Jones i.e., Stella Jones and Interfor go up and down completely randomly.
Pair Corralation between Stella Jones and Interfor
Assuming the 90 days horizon Stella Jones is expected to under-perform the Interfor. But the pink sheet apears to be less risky and, when comparing its historical volatility, Stella Jones is 1.55 times less risky than Interfor. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Interfor is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,661 in Interfor on August 24, 2024 and sell it today you would lose (291.00) from holding Interfor or give up 17.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.6% |
| Values | Daily Returns |
Stella Jones vs. Interfor
Performance |
| Timeline |
| Stella Jones |
| Interfor |
Stella Jones and Interfor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stella Jones and Interfor
The main advantage of trading using opposite Stella Jones and Interfor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones position performs unexpectedly, Interfor 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 Interfor will offset losses from the drop in Interfor's long position.| Stella Jones vs. Canfor | Stella Jones vs. West Fraser Timber | Stella Jones vs. Interfor | Stella Jones vs. Svenska Cellulosa Aktiebolaget |
| Interfor vs. Ascendant Resources | Interfor vs. Cantex Mine Development | Interfor vs. Amarc Resources | Interfor 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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