Correlation Between WSP Global and Interfor Corp

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

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

Diversification Opportunities for WSP Global and Interfor Corp

0.41

Correlation Coefficient

WSP Global  Interfor Corp

Very weak diversification

The 3 months correlation between WSP and Interfor is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding WSP Global and Interfor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interfor Corp and WSP Global 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 WSP Global are associated (or correlated) with Interfor Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interfor Corp has no effect on the direction of WSP Global i.e., WSP Global and Interfor Corp go up and down completely randomly.

Pair Corralation between WSP Global and Interfor Corp

Assuming the 90 days trading horizon WSP Global is expected to generate 0.53 times more return on investment than Interfor Corp. However, WSP Global is 1.9 times less risky than Interfor Corp. It trades about -0.03 of its potential returns per unit of risk. Interfor Corp is currently generating about -0.11 per unit of risk. If you would invest  27,777  in WSP Global on June 29, 2025 and sell it today you would lose (658.00) from holding WSP Global or give up 2.37% of portfolio value over 90 days.

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

WSP Global  vs.  Interfor Corp

WSP Global

Risk-Adjusted Performance

Weakest

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

Interfor Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Interfor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in October 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with WSP Global and Interfor Corp

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

The idea behind WSP Global and Interfor Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.