Correlation Between Canadian Natural and Rayonier

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

By analyzing existing cross correlation between Canadian Natural Resources and Rayonier, you can compare the effects of market volatilities on Canadian Natural and Rayonier 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 Canadian Natural with a short position of Rayonier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Rayonier.

Diversification Opportunities for Canadian Natural and Rayonier

-0.45

Correlation Coefficient

Canadian Natural  Rayonier

Very good diversification

The 3 months correlation between Canadian and Rayonier is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Rayonier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rayonier and Canadian Natural 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 Canadian Natural Resources are associated (or correlated) with Rayonier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rayonier has no effect on the direction of Canadian Natural i.e., Canadian Natural and Rayonier go up and down completely randomly.

Pair Corralation between Canadian Natural and Rayonier

Assuming the 90 days horizon Canadian Natural Resources is expected to generate 1.23 times more return on investment than Rayonier. However, Canadian Natural is 1.23 times more volatile than Rayonier. It trades about 0.05 of its potential returns per unit of risk. Rayonier is currently generating about -0.03 per unit of risk. If you would invest  2,562  in Canadian Natural Resources on April 25, 2025 and sell it today you would earn a total of  118.00  from holding Canadian Natural Resources or generate 4.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Canadian Natural Resources  vs.  Rayonier

Canadian Natural Res

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Natural Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Canadian Natural is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Rayonier

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rayonier has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Rayonier is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Canadian Natural and Rayonier

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

The idea behind Canadian Natural Resources and Rayonier 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.