Correlation Between Canfor and SVENSKA CELLULO

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

By analyzing existing cross correlation between Canfor and SVENSKA CELLULO B , you can compare the effects of market volatilities on Canfor and SVENSKA CELLULO 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 SVENSKA CELLULO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor and SVENSKA CELLULO.

Diversification Opportunities for Canfor and SVENSKA CELLULO

-0.54

Correlation Coefficient

Canfor  SVENSKA CELLULO

Excellent diversification

The 3 months correlation between Canfor and SVENSKA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Canfor and SVENSKA CELLULO B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVENSKA CELLULO B 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 SVENSKA CELLULO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVENSKA CELLULO B has no effect on the direction of Canfor i.e., Canfor and SVENSKA CELLULO go up and down completely randomly.

Pair Corralation between Canfor and SVENSKA CELLULO

Assuming the 90 days horizon Canfor is expected to generate 1.36 times more return on investment than SVENSKA CELLULO. However, Canfor is 1.36 times more volatile than SVENSKA CELLULO B . It trades about 0.07 of its potential returns per unit of risk. SVENSKA CELLULO B is currently generating about -0.1 per unit of risk. If you would invest  780.00  in Canfor on April 24, 2025 and sell it today you would earn a total of  60.00  from holding Canfor or generate 7.69% return on investment over 90 days.

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

Canfor  vs.  SVENSKA CELLULO B

Canfor

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canfor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Canfor may actually be approaching a critical reversion point that can send shares even higher in August 2025.

SVENSKA CELLULO B

Risk-Adjusted Performance

Very Weak

Over the last 90 days SVENSKA CELLULO B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Canfor and SVENSKA CELLULO

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

The idea behind Canfor and SVENSKA CELLULO B 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.