Correlation Between Canfor Pulp and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Canfor Pulp and Dow Jones 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 Pulp and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canfor Pulp Products and Dow Jones Industrial, you can compare the effects of market volatilities on Canfor Pulp and Dow Jones 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 Pulp with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor Pulp and Dow Jones.
Diversification Opportunities for Canfor Pulp and Dow Jones
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canfor and Dow is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Canfor Pulp Products and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Canfor Pulp 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 Pulp Products are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Canfor Pulp i.e., Canfor Pulp and Dow Jones go up and down completely randomly.
Pair Corralation between Canfor Pulp and Dow Jones
Assuming the 90 days trading horizon Canfor Pulp Products is expected to under-perform the Dow Jones. In addition to that, Canfor Pulp is 5.48 times more volatile than Dow Jones Industrial. It trades about -0.07 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.12 per unit of volatility. If you would invest 4,720,712 in Dow Jones Industrial on August 25, 2025 and sell it today you would lose (96,171) from holding Dow Jones Industrial or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canfor Pulp Products vs. Dow Jones Industrial
Performance |
| Timeline |
Canfor Pulp and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Canfor Pulp Products
Pair trading matchups for Canfor Pulp
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Canfor Pulp and Dow Jones
The main advantage of trading using opposite Canfor Pulp and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor Pulp position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Canfor Pulp vs. Wealth Minerals | Canfor Pulp vs. Star Royalties | Canfor Pulp vs. Electra Battery Materials | Canfor Pulp vs. CHARBONE Hydrogen |
| Dow Jones vs. Solstice Advanced Materials, | Dow Jones vs. Mayfair Gold Corp | Dow Jones vs. Eagle Materials | Dow Jones vs. Finnair Oyj |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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