Correlation Between Meta Platforms and Canfor

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

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

Diversification Opportunities for Meta Platforms and Canfor

-0.65

Correlation Coefficient

Meta Platforms  Canfor

Excellent diversification

The 3 months correlation between Meta and Canfor is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms CDR and Canfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor and Meta Platforms 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 Meta Platforms CDR are associated (or correlated) with Canfor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor has no effect on the direction of Meta Platforms i.e., Meta Platforms and Canfor go up and down completely randomly.

Pair Corralation between Meta Platforms and Canfor

Assuming the 90 days trading horizon Meta Platforms CDR is expected to under-perform the Canfor. But the stock apears to be less risky and, when comparing its historical volatility, Meta Platforms CDR is 1.59 times less risky than Canfor. The stock trades about -0.15 of its potential returns per unit of risk. The Canfor is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,378  in Canfor on June 14, 2025 and sell it today you would earn a total of  12.00  from holding Canfor or generate 0.87% return on investment over 90 days.

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

Meta Platforms CDR  vs.  Canfor

Meta Platforms CDR

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Platforms CDR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Meta Platforms may actually be approaching a critical reversion point that can send shares even higher in October 2025.

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.

Pair Trading with Meta Platforms and Canfor

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

The idea behind Meta Platforms CDR and Canfor 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.