rudi

Adding Wood to Your Portolio: A Worthwhile Investment

Hi,

I created the table stated below (I hope its not too screwed up), showing correlations of CUT and PCL to commodities and S&P500, based on daily returns.

Mind that CUT (0.68) and even more PCL (0.78) represent the movement of the stock market and are both not correlated with commodities as one would suspect.


CUT RJI RJN SPY PCL
CUT 1.00 0.22 0.07 0.68 0.48
RJI 0.22 1.00 0.89 0.02 -0.15
RJN 0.07 0.89 1.00 -0.09 -0.22
SPY 0.68 0.02 -0.09 1.00 0.78
PCL 0.48 -0.15 -0.22 0.78 1.00

I suggest to use RJI to diversify a portfolio. It includes 1% lumber, but I think that wood prices are anyhow highly correlated with the rest of RJI, especially oil and gas.

Where do you get historic data of wood prices?

Rudi