Correlation Between GreenFirst Forest and Conifex Timber

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

Diversification Opportunities for GreenFirst Forest and Conifex Timber

0.38

Correlation Coefficient

GreenFirst Forest  Conifex Timber

Weak diversification

The 3 months correlation between GreenFirst and Conifex is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding GreenFirst Forest Products and Conifex Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifex Timber 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 Conifex Timber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conifex Timber has no effect on the direction of GreenFirst Forest i.e., GreenFirst Forest and Conifex Timber go up and down completely randomly.

Pair Corralation between GreenFirst Forest and Conifex Timber

Assuming the 90 days horizon GreenFirst Forest Products is expected to under-perform the Conifex Timber. But the pink sheet apears to be less risky and, when comparing its historical volatility, GreenFirst Forest Products is 1.46 times less risky than Conifex Timber. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Conifex Timber is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Conifex Timber on May 3, 2025 and sell it today you would earn a total of  3.00  from holding Conifex Timber or generate 13.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

GreenFirst Forest Products  vs.  Conifex Timber

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 unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Conifex Timber

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Conifex Timber are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Conifex Timber reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GreenFirst Forest and Conifex Timber

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

The idea behind GreenFirst Forest Products and Conifex Timber 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.