Correlation Between SVENSKA CELLULO and Boise Cascade
Can any of the company-specific risk be diversified away by investing in both SVENSKA CELLULO and Boise Cascade 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 SVENSKA CELLULO and Boise Cascade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SVENSKA CELLULO B and Boise Cascade, you can compare the effects of market volatilities on SVENSKA CELLULO and Boise Cascade 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 SVENSKA CELLULO with a short position of Boise Cascade. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVENSKA CELLULO and Boise Cascade.
Diversification Opportunities for SVENSKA CELLULO and Boise Cascade
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between SVENSKA and Boise is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SVENSKA CELLULO B and Boise Cascade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boise Cascade and SVENSKA CELLULO 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 SVENSKA CELLULO B are associated (or correlated) with Boise Cascade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boise Cascade has no effect on the direction of SVENSKA CELLULO i.e., SVENSKA CELLULO and Boise Cascade go up and down completely randomly.
Pair Corralation between SVENSKA CELLULO and Boise Cascade
Assuming the 90 days trading horizon SVENSKA CELLULO B is expected to under-perform the Boise Cascade. But the stock apears to be less risky and, when comparing its historical volatility, SVENSKA CELLULO B is 1.59 times less risky than Boise Cascade. The stock trades about -0.09 of its potential returns per unit of risk. The Boise Cascade is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 12,631 in Boise Cascade on September 24, 2024 and sell it today you would lose (876.00) from holding Boise Cascade or give up 6.94% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SVENSKA CELLULO B vs. Boise Cascade
Performance |
Timeline |
SVENSKA CELLULO B |
Boise Cascade |
SVENSKA CELLULO and Boise Cascade Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SVENSKA CELLULO and Boise Cascade
The main advantage of trading using opposite SVENSKA CELLULO and Boise Cascade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVENSKA CELLULO position performs unexpectedly, Boise Cascade 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 Boise Cascade will offset losses from the drop in Boise Cascade's long position.SVENSKA CELLULO vs. Svenska Cellulosa Aktiebolaget | SVENSKA CELLULO vs. Svenska Cellulosa Aktiebolaget | SVENSKA CELLULO vs. West Fraser Timber | SVENSKA CELLULO vs. UFP Industries |
Boise Cascade vs. Svenska Cellulosa Aktiebolaget | Boise Cascade vs. SVENSKA CELLULO B | Boise Cascade vs. Svenska Cellulosa Aktiebolaget | Boise Cascade vs. West Fraser Timber |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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