Correlation Between UFP Industries and Corticeira Amorim
Can any of the company-specific risk be diversified away by investing in both UFP Industries and Corticeira Amorim 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 UFP Industries and Corticeira Amorim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UFP Industries and Corticeira Amorim SGPS, you can compare the effects of market volatilities on UFP Industries and Corticeira Amorim 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 UFP Industries with a short position of Corticeira Amorim. Check out your portfolio center. Please also check ongoing floating volatility patterns of UFP Industries and Corticeira Amorim.
Diversification Opportunities for UFP Industries and Corticeira Amorim
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UFP and Corticeira is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding UFP Industries and Corticeira Amorim SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corticeira Amorim SGPS and UFP Industries 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 UFP Industries are associated (or correlated) with Corticeira Amorim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corticeira Amorim SGPS has no effect on the direction of UFP Industries i.e., UFP Industries and Corticeira Amorim go up and down completely randomly.
Pair Corralation between UFP Industries and Corticeira Amorim
Assuming the 90 days horizon UFP Industries is expected to generate 2.55 times more return on investment than Corticeira Amorim. However, UFP Industries is 2.55 times more volatile than Corticeira Amorim SGPS. It trades about 0.16 of its potential returns per unit of risk. Corticeira Amorim SGPS is currently generating about 0.02 per unit of risk. If you would invest 11,910 in UFP Industries on August 30, 2024 and sell it today you would earn a total of 1,085 from holding UFP Industries or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UFP Industries vs. Corticeira Amorim SGPS
Performance |
| Timeline |
| UFP Industries |
| Corticeira Amorim SGPS |
UFP Industries and Corticeira Amorim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UFP Industries and Corticeira Amorim
The main advantage of trading using opposite UFP Industries and Corticeira Amorim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UFP Industries position performs unexpectedly, Corticeira Amorim 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 Corticeira Amorim will offset losses from the drop in Corticeira Amorim's long position.| UFP Industries vs. Svenska Cellulosa Aktiebolaget | UFP Industries vs. Superior Plus Corp | UFP Industries vs. NMI Holdings | UFP Industries vs. SIVERS SEMICONDUCTORS AB |
| Corticeira Amorim vs. Svenska Cellulosa Aktiebolaget | Corticeira Amorim vs. Superior Plus Corp | Corticeira Amorim vs. NMI Holdings | Corticeira Amorim vs. SIVERS SEMICONDUCTORS AB |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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