Correlation Between 3M and Resolute Forest
Can any of the company-specific risk be diversified away by investing in both 3M and Resolute 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 3M and Resolute Forest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Resolute Forest Products, you can compare the effects of market volatilities on 3M and Resolute 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 3M with a short position of Resolute Forest. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Resolute Forest.
Diversification Opportunities for 3M and Resolute Forest
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3M and Resolute is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and Resolute Forest Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resolute Forest Products and 3M 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 3M Company are associated (or correlated) with Resolute Forest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resolute Forest Products has no effect on the direction of 3M i.e., 3M and Resolute Forest go up and down completely randomly.
Pair Corralation between 3M and Resolute Forest
If you would invest 2,192 in Resolute Forest Products on September 20, 2024 and sell it today you would earn a total of 0.00 from holding Resolute Forest Products or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 1.59% |
Values | Daily Returns |
3M Company vs. Resolute Forest Products
Performance |
Timeline |
3M Company |
Resolute Forest Products |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
3M and Resolute Forest Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 3M and Resolute Forest
The main advantage of trading using opposite 3M and Resolute Forest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, Resolute 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 Resolute Forest will offset losses from the drop in Resolute Forest's long position.3M vs. Vast Renewables Limited | 3M vs. 1847 Holdings LLC | 3M vs. Westport Fuel Systems | 3M vs. Brookfield Business Partners |
Resolute Forest vs. Franklin Credit Management | Resolute Forest vs. Logan Ridge Finance | Resolute Forest vs. PennantPark Floating Rate | Resolute Forest vs. Summa Silver Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |