Correlation Between Boise Cascade and Svenska Cellulosa
Can any of the company-specific risk be diversified away by investing in both Boise Cascade and Svenska Cellulosa 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 Boise Cascade and Svenska Cellulosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boise Cascade and Svenska Cellulosa Aktiebolaget, you can compare the effects of market volatilities on Boise Cascade and Svenska Cellulosa 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 Boise Cascade with a short position of Svenska Cellulosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boise Cascade and Svenska Cellulosa.
Diversification Opportunities for Boise Cascade and Svenska Cellulosa
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boise and Svenska is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Boise Cascade and Svenska Cellulosa Aktiebolaget in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Cellulosa and Boise Cascade 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 Boise Cascade are associated (or correlated) with Svenska Cellulosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Cellulosa has no effect on the direction of Boise Cascade i.e., Boise Cascade and Svenska Cellulosa go up and down completely randomly.
Pair Corralation between Boise Cascade and Svenska Cellulosa
Assuming the 90 days horizon Boise Cascade is expected to under-perform the Svenska Cellulosa. In addition to that, Boise Cascade is 1.92 times more volatile than Svenska Cellulosa Aktiebolaget. It trades about -0.35 of its total potential returns per unit of risk. Svenska Cellulosa Aktiebolaget is currently generating about -0.25 per unit of volatility. If you would invest 1,226 in Svenska Cellulosa Aktiebolaget on September 24, 2024 and sell it today you would lose (68.00) from holding Svenska Cellulosa Aktiebolaget or give up 5.55% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Boise Cascade vs. Svenska Cellulosa Aktiebolaget
Performance |
Timeline |
Boise Cascade |
Svenska Cellulosa |
Boise Cascade and Svenska Cellulosa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Boise Cascade and Svenska Cellulosa
The main advantage of trading using opposite Boise Cascade and Svenska Cellulosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boise Cascade position performs unexpectedly, Svenska Cellulosa 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 Cellulosa will offset losses from the drop in Svenska Cellulosa's long position.Boise Cascade vs. Svenska Cellulosa Aktiebolaget | Boise Cascade vs. SVENSKA CELLULO B | Boise Cascade vs. Svenska Cellulosa Aktiebolaget | Boise Cascade vs. West Fraser Timber |
Svenska Cellulosa vs. Svenska Cellulosa Aktiebolaget | Svenska Cellulosa vs. SVENSKA CELLULO B | Svenska Cellulosa vs. West Fraser Timber | Svenska Cellulosa vs. UFP Industries |
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 Stocks Directory module to find actively traded stocks across global markets.
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