Correlation Between Canfor and S A P

Can any of the company-specific risk be diversified away by investing in both Canfor and S A P 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 Canfor and S A P into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canfor and Saputo Inc, you can compare the effects of market volatilities on Canfor and S A P 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 Canfor with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor and S A P.

Diversification Opportunities for Canfor and S A P

0.68

Correlation Coefficient

Canfor  S A P

Poor diversification

The 3 months correlation between Canfor and SAP is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Canfor and Saputo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saputo Inc and Canfor 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 Canfor are associated (or correlated) with S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saputo Inc has no effect on the direction of Canfor i.e., Canfor and S A P go up and down completely randomly.

Pair Corralation between Canfor and S A P

Assuming the 90 days trading horizon Canfor is expected to generate 1.08 times less return on investment than S A P. In addition to that, Canfor is 1.38 times more volatile than Saputo Inc. It trades about 0.08 of its total potential returns per unit of risk. Saputo Inc is currently generating about 0.12 per unit of volatility. If you would invest  2,611  in Saputo Inc on April 23, 2025 and sell it today you would earn a total of  261.00  from holding Saputo Inc or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Canfor  vs.  Saputo Inc

Canfor

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canfor are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Canfor may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Saputo Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saputo Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, S A P may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Canfor and S A P

The main advantage of trading using opposite Canfor and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor position performs unexpectedly, S A P 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 S A P will offset losses from the drop in S A P's long position.

The idea behind Canfor and Saputo Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.