Correlation Between Canfor and Applied Materials,

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

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

Diversification Opportunities for Canfor and Applied Materials,

0.67

Correlation Coefficient

Canfor  Applied Materials,

Poor diversification

The 3 months correlation between Canfor and Applied is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Canfor and Applied Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials, and Canfor 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 Canfor are associated (or correlated) with Applied Materials,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials, has no effect on the direction of Canfor i.e., Canfor and Applied Materials, go up and down completely randomly.

Pair Corralation between Canfor and Applied Materials,

Assuming the 90 days trading horizon Canfor is expected to generate 11.65 times less return on investment than Applied Materials,. But when comparing it to its historical volatility, Canfor is 1.35 times less risky than Applied Materials,. It trades about 0.0 of its potential returns per unit of risk. Applied Materials, is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,825  in Applied Materials, on May 26, 2025 and sell it today you would earn a total of  20.00  from holding Applied Materials, or generate 1.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Canfor  vs.  Applied Materials,

Canfor

Risk-Adjusted Performance

Weakest

Over the last 90 days Canfor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Canfor is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Applied Materials,

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Applied Materials, is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Canfor and Applied Materials,

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

The idea behind Canfor and Applied Materials, 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 Stocks Directory module to find actively traded stocks across global markets.