Correlation Between IShares Fundamental and GreenFirst Forest

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

By analyzing existing cross correlation between iShares Fundamental Hedged and GreenFirst Forest Products, you can compare the effects of market volatilities on IShares Fundamental and GreenFirst Forest 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 IShares Fundamental with a short position of GreenFirst Forest. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Fundamental and GreenFirst Forest.

Diversification Opportunities for IShares Fundamental and GreenFirst Forest

-0.25

Correlation Coefficient

IShares Fundamental  GreenFirst Forest

Very good diversification

The 3 months correlation between IShares and GreenFirst is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding iShares Fundamental Hedged and GreenFirst Forest Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenFirst Forest and IShares Fundamental 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 iShares Fundamental Hedged are associated (or correlated) with GreenFirst Forest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenFirst Forest has no effect on the direction of IShares Fundamental i.e., IShares Fundamental and GreenFirst Forest go up and down completely randomly.

Pair Corralation between IShares Fundamental and GreenFirst Forest

Assuming the 90 days trading horizon iShares Fundamental Hedged is expected to generate 0.27 times more return on investment than GreenFirst Forest. However, iShares Fundamental Hedged is 3.65 times less risky than GreenFirst Forest. It trades about 0.05 of its potential returns per unit of risk. GreenFirst Forest Products is currently generating about -0.21 per unit of risk. If you would invest  5,460  in iShares Fundamental Hedged on October 23, 2024 and sell it today you would earn a total of  117.00  from holding iShares Fundamental Hedged or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

iShares Fundamental Hedged  vs.  GreenFirst Forest Products

iShares Fundamental

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Fundamental Hedged are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Fundamental is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

GreenFirst Forest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GreenFirst Forest Products has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with IShares Fundamental and GreenFirst Forest

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

The idea behind iShares Fundamental Hedged and GreenFirst Forest Products 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.