Correlation Between GreenFirst Forest and Ufp Industries

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

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

Diversification Opportunities for GreenFirst Forest and Ufp Industries

0.44

Correlation Coefficient

GreenFirst Forest  Ufp Industries

Very weak diversification

The 3 months correlation between GreenFirst and Ufp is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding GreenFirst Forest Products and Ufp Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ufp Industries and GreenFirst Forest 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 GreenFirst Forest Products are associated (or correlated) with Ufp Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ufp Industries has no effect on the direction of GreenFirst Forest i.e., GreenFirst Forest and Ufp Industries go up and down completely randomly.

Pair Corralation between GreenFirst Forest and Ufp Industries

Assuming the 90 days horizon GreenFirst Forest Products is expected to under-perform the Ufp Industries. In addition to that, GreenFirst Forest is 2.47 times more volatile than Ufp Industries. It trades about -0.06 of its total potential returns per unit of risk. Ufp Industries is currently generating about -0.05 per unit of volatility. If you would invest  11,182  in Ufp Industries on December 29, 2024 and sell it today you would lose (551.00) from holding Ufp Industries or give up 4.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

GreenFirst Forest Products  vs.  Ufp Industries

GreenFirst Forest

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Ufp Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ufp Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Ufp Industries is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with GreenFirst Forest and Ufp Industries

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

The idea behind GreenFirst Forest Products and Ufp Industries 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.