Correlation Between Dow Jones and Canfor Pulp
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Canfor Pulp 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 Dow Jones and Canfor Pulp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Canfor Pulp Products, you can compare the effects of market volatilities on Dow Jones and Canfor Pulp 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 Dow Jones with a short position of Canfor Pulp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Canfor Pulp.
Diversification Opportunities for Dow Jones and Canfor Pulp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Canfor is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Canfor Pulp Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor Pulp Products and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Canfor Pulp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor Pulp Products has no effect on the direction of Dow Jones i.e., Dow Jones and Canfor Pulp go up and down completely randomly.
Pair Corralation between Dow Jones and Canfor Pulp
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.14 times more return on investment than Canfor Pulp. However, Dow Jones Industrial is 7.0 times less risky than Canfor Pulp. It trades about 0.05 of its potential returns per unit of risk. Canfor Pulp Products is currently generating about -0.14 per unit of risk. If you would invest 4,528,247 in Dow Jones Industrial on August 25, 2025 and sell it today you would earn a total of 96,294 from holding Dow Jones Industrial or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Dow Jones Industrial vs. Canfor Pulp Products
Performance |
| Timeline |
Dow Jones and Canfor Pulp Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Canfor Pulp Products
Pair trading matchups for Canfor Pulp
Pair Trading with Dow Jones and Canfor Pulp
The main advantage of trading using opposite Dow Jones and Canfor Pulp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Canfor Pulp 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 Pulp will offset losses from the drop in Canfor Pulp's long position.| Dow Jones vs. Solstice Advanced Materials, | Dow Jones vs. Mayfair Gold Corp | Dow Jones vs. Eagle Materials | Dow Jones vs. Finnair Oyj |
| Canfor Pulp vs. Wealth Minerals | Canfor Pulp vs. Star Royalties | Canfor Pulp vs. Electra Battery Materials | Canfor Pulp vs. CHARBONE Hydrogen |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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