Correlation Between West Fraser and Conifex Timber
Can any of the company-specific risk be diversified away by investing in both West Fraser 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 West Fraser and Conifex Timber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between West Fraser Timber and Conifex Timber, you can compare the effects of market volatilities on West Fraser 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 West Fraser with a short position of Conifex Timber. Check out your portfolio center. Please also check ongoing floating volatility patterns of West Fraser and Conifex Timber.
Diversification Opportunities for West Fraser and Conifex Timber
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between West and Conifex is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding West Fraser Timber and Conifex Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifex Timber and West Fraser 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 West Fraser Timber 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 West Fraser i.e., West Fraser and Conifex Timber go up and down completely randomly.
Pair Corralation between West Fraser and Conifex Timber
If you would invest 33.00 in Conifex Timber on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Conifex Timber or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
West Fraser Timber vs. Conifex Timber
Performance |
| Timeline |
| West Fraser Timber |
| Conifex Timber |
West Fraser and Conifex Timber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with West Fraser and Conifex Timber
The main advantage of trading using opposite West Fraser and Conifex Timber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if West Fraser 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.| West Fraser vs. Simpson Manufacturing | West Fraser vs. Interfor | West Fraser vs. Ufp Industries | West Fraser vs. Canfor |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |