Correlation Between GreenFirst Forest and IShares Canadian

Can any of the company-specific risk be diversified away by investing in both GreenFirst Forest and IShares Canadian 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 IShares Canadian 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 iShares Canadian HYBrid, you can compare the effects of market volatilities on GreenFirst Forest and IShares Canadian 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 IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenFirst Forest and IShares Canadian.

Diversification Opportunities for GreenFirst Forest and IShares Canadian

-0.85

Correlation Coefficient

GreenFirst Forest  IShares Canadian

Pay attention - limited upside

The 3 months correlation between GreenFirst and IShares is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding GreenFirst Forest Products and iShares Canadian HYBrid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian HYBrid 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 IShares Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian HYBrid has no effect on the direction of GreenFirst Forest i.e., GreenFirst Forest and IShares Canadian go up and down completely randomly.

Pair Corralation between GreenFirst Forest and IShares Canadian

Assuming the 90 days horizon GreenFirst Forest Products is expected to under-perform the IShares Canadian. In addition to that, GreenFirst Forest is 14.33 times more volatile than iShares Canadian HYBrid. It trades about -0.13 of its total potential returns per unit of risk. iShares Canadian HYBrid is currently generating about 0.1 per unit of volatility. If you would invest  1,962  in iShares Canadian HYBrid on December 24, 2024 and sell it today you would earn a total of  34.00  from holding iShares Canadian HYBrid or generate 1.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

GreenFirst Forest Products  vs.  iShares Canadian HYBrid

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.

iShares Canadian HYBrid

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Canadian HYBrid are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, IShares Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GreenFirst Forest and IShares Canadian

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

The idea behind GreenFirst Forest Products and iShares Canadian HYBrid 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.