Correlation Between Jeld Wen and Western Copper
Can any of the company-specific risk be diversified away by investing in both Jeld Wen and Western Copper 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 Jeld Wen and Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeld Wen Holding and Western Copper and, you can compare the effects of market volatilities on Jeld Wen and Western Copper 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 Jeld Wen with a short position of Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and Western Copper.
Diversification Opportunities for Jeld Wen and Western Copper
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jeld and Western is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper and Jeld Wen 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 Jeld Wen Holding are associated (or correlated) with Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Jeld Wen i.e., Jeld Wen and Western Copper go up and down completely randomly.
Pair Corralation between Jeld Wen and Western Copper
Given the investment horizon of 90 days Jeld Wen Holding is expected to under-perform the Western Copper. In addition to that, Jeld Wen is 2.17 times more volatile than Western Copper and. It trades about -0.12 of its total potential returns per unit of risk. Western Copper and is currently generating about 0.07 per unit of volatility. If you would invest 107.00 in Western Copper and on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Western Copper and or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeld Wen Holding vs. Western Copper and
Performance |
| Timeline |
| Jeld Wen Holding |
| Western Copper |
Jeld Wen and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeld Wen and Western Copper
The main advantage of trading using opposite Jeld Wen and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Jeld Wen vs. Trex Company | Jeld Wen vs. Armstrong World Industries | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Apogee Enterprises |
| Western Copper vs. NioCorp Developments Ltd | Western Copper vs. Teck Resources Ltd | Western Copper vs. Sigma Lithium Resources | Western Copper vs. MP Materials Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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