Correlation Between Svenska Cellulosa and Canfor
Can any of the company-specific risk be diversified away by investing in both Svenska Cellulosa 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 Svenska Cellulosa and Canfor 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 Canfor, you can compare the effects of market volatilities on Svenska Cellulosa 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 Svenska Cellulosa with a short position of Canfor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Svenska Cellulosa and Canfor.
Diversification Opportunities for Svenska Cellulosa and Canfor
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Svenska and Canfor is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Svenska Cellulosa Aktiebolaget and Canfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor 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 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 Svenska Cellulosa i.e., Svenska Cellulosa and Canfor go up and down completely randomly.
Pair Corralation between Svenska Cellulosa and Canfor
Assuming the 90 days horizon Svenska Cellulosa Aktiebolaget is expected to generate 0.73 times more return on investment than Canfor. However, Svenska Cellulosa Aktiebolaget is 1.36 times less risky than Canfor. It trades about 0.0 of its potential returns per unit of risk. Canfor is currently generating about -0.01 per unit of risk. If you would invest 1,385 in Svenska Cellulosa Aktiebolaget on August 28, 2024 and sell it today you would lose (65.00) from holding Svenska Cellulosa Aktiebolaget or give up 4.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.93% |
| Values | Daily Returns |
Svenska Cellulosa Aktiebolaget vs. Canfor
Performance |
| Timeline |
| Svenska Cellulosa |
| Canfor |
Svenska Cellulosa and Canfor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Svenska Cellulosa and Canfor
The main advantage of trading using opposite Svenska Cellulosa and Canfor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Svenska Cellulosa 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.| Svenska Cellulosa vs. Interfor | Svenska Cellulosa vs. Western Forest Products | Svenska Cellulosa vs. Stella Jones | Svenska Cellulosa vs. Simpson Manufacturing |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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