Correlation Between Weyerhaeuser and Plum Creek
Can any of the company-specific risk be diversified away by investing in both Weyerhaeuser and Plum Creek 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 Weyerhaeuser and Plum Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyerhaeuser and Plum Creek Timber, you can compare the effects of market volatilities on Weyerhaeuser and Plum Creek 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 Weyerhaeuser with a short position of Plum Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyerhaeuser and Plum Creek.
Diversification Opportunities for Weyerhaeuser and Plum Creek
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Weyerhaeuser and Plum is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Weyerhaeuser and Plum Creek Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plum Creek Timber and Weyerhaeuser 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 Weyerhaeuser are associated (or correlated) with Plum Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plum Creek Timber has no effect on the direction of Weyerhaeuser i.e., Weyerhaeuser and Plum Creek go up and down completely randomly.
Pair Corralation between Weyerhaeuser and Plum Creek
If you would invest (100.00) in Plum Creek Timber on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Plum Creek Timber or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Weyerhaeuser vs. Plum Creek Timber
Performance |
| Timeline |
| Weyerhaeuser |
| Plum Creek Timber |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Weyerhaeuser and Plum Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyerhaeuser and Plum Creek
The main advantage of trading using opposite Weyerhaeuser and Plum Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyerhaeuser position performs unexpectedly, Plum Creek 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 Plum Creek will offset losses from the drop in Plum Creek's long position.| Weyerhaeuser vs. Rayonier | Weyerhaeuser vs. Lamar Advertising | Weyerhaeuser vs. Farmland Partners | Weyerhaeuser vs. Gladstone Land |
| Plum Creek vs. Boston Omaha Corp | Plum Creek vs. Playtika Holding Corp | Plum Creek vs. Global E Online | Plum Creek vs. Bel Fuse A |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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