Correlation Between UFP Industries and Corticeira Amorim

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Can any of the company-specific risk be diversified away by investing in both UFP Industries and Corticeira Amorim 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 UFP Industries and Corticeira Amorim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UFP Industries and Corticeira Amorim SGPS, you can compare the effects of market volatilities on UFP Industries and Corticeira Amorim 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 UFP Industries with a short position of Corticeira Amorim. Check out your portfolio center. Please also check ongoing floating volatility patterns of UFP Industries and Corticeira Amorim.

Diversification Opportunities for UFP Industries and Corticeira Amorim

UFPCorticeiraDiversified AwayUFPCorticeiraDiversified Away100%
0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between UFP and Corticeira is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding UFP Industries and Corticeira Amorim SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corticeira Amorim SGPS and UFP Industries 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 UFP Industries are associated (or correlated) with Corticeira Amorim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corticeira Amorim SGPS has no effect on the direction of UFP Industries i.e., UFP Industries and Corticeira Amorim go up and down completely randomly.

Pair Corralation between UFP Industries and Corticeira Amorim

Assuming the 90 days horizon UFP Industries is expected to under-perform the Corticeira Amorim. In addition to that, UFP Industries is 1.95 times more volatile than Corticeira Amorim SGPS. It trades about -0.14 of its total potential returns per unit of risk. Corticeira Amorim SGPS is currently generating about -0.16 per unit of volatility. If you would invest  874.00  in Corticeira Amorim SGPS on October 15, 2024 and sell it today you would lose (81.00) from holding Corticeira Amorim SGPS or give up 9.27% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

UFP Industries  vs.  Corticeira Amorim SGPS

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510
JavaScript chart by amCharts 3.21.15UF3 AS4
       Timeline  
UFP Industries 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days UFP Industries 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan105110115120125130
Corticeira Amorim SGPS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Corticeira Amorim SGPS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan88.28.48.68.8

UFP Industries and Corticeira Amorim Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.29-2.47-1.64-0.810.00.771.542.323.1 0.10.20.30.4
JavaScript chart by amCharts 3.21.15UF3 AS4
       Returns  

Pair Trading with UFP Industries and Corticeira Amorim

The main advantage of trading using opposite UFP Industries and Corticeira Amorim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UFP Industries position performs unexpectedly, Corticeira Amorim 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 Corticeira Amorim will offset losses from the drop in Corticeira Amorim's long position.
The idea behind UFP Industries and Corticeira Amorim SGPS 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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