Correlation Between Nature Wood and Boise Cascad

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

By analyzing existing cross correlation between Nature Wood Group and Boise Cascad Llc, you can compare the effects of market volatilities on Nature Wood and Boise Cascad 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 Nature Wood with a short position of Boise Cascad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nature Wood and Boise Cascad.

Diversification Opportunities for Nature Wood and Boise Cascad

-0.22

Correlation Coefficient

Nature Wood  Boise Cascad

Very good diversification

The 3 months correlation between Nature and Boise is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nature Wood Group and Boise Cascad Llc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boise Cascad Llc and Nature Wood 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 Nature Wood Group are associated (or correlated) with Boise Cascad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boise Cascad Llc has no effect on the direction of Nature Wood i.e., Nature Wood and Boise Cascad go up and down completely randomly.

Pair Corralation between Nature Wood and Boise Cascad

Given the investment horizon of 90 days Nature Wood Group is expected to generate 9.91 times more return on investment than Boise Cascad. However, Nature Wood is 9.91 times more volatile than Boise Cascad Llc. It trades about 0.07 of its potential returns per unit of risk. Boise Cascad Llc is currently generating about -0.06 per unit of risk. If you would invest  135.00  in Nature Wood Group on May 5, 2025 and sell it today you would lose (28.00) from holding Nature Wood Group or give up 20.74% of portfolio value over 90 days.

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

Nature Wood Group  vs.  Boise Cascad Llc

Nature Wood Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nature Wood Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Nature Wood disclosed solid returns over the last few months and may actually be approaching a breakup point.

Boise Cascad Llc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boise Cascad Llc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Nature Wood and Boise Cascad

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

The idea behind Nature Wood Group and Boise Cascad Llc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.