Correlation Between Jamieson Wellness and Doman Building
Can any of the company-specific risk be diversified away by investing in both Jamieson Wellness and Doman Building 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 Jamieson Wellness and Doman Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jamieson Wellness and Doman Building Materials, you can compare the effects of market volatilities on Jamieson Wellness and Doman Building 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 Jamieson Wellness with a short position of Doman Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jamieson Wellness and Doman Building.
Diversification Opportunities for Jamieson Wellness and Doman Building
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jamieson and Doman is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Jamieson Wellness and Doman Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doman Building Materials and Jamieson Wellness 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 Jamieson Wellness are associated (or correlated) with Doman Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doman Building Materials has no effect on the direction of Jamieson Wellness i.e., Jamieson Wellness and Doman Building go up and down completely randomly.
Pair Corralation between Jamieson Wellness and Doman Building
Assuming the 90 days trading horizon Jamieson Wellness is expected to generate 0.7 times more return on investment than Doman Building. However, Jamieson Wellness is 1.44 times less risky than Doman Building. It trades about -0.17 of its potential returns per unit of risk. Doman Building Materials is currently generating about -0.25 per unit of risk. If you would invest 3,646 in Jamieson Wellness on October 25, 2024 and sell it today you would lose (154.00) from holding Jamieson Wellness or give up 4.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jamieson Wellness vs. Doman Building Materials
Performance |
| Timeline |
| Jamieson Wellness |
| Doman Building Materials |
Jamieson Wellness and Doman Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jamieson Wellness and Doman Building
The main advantage of trading using opposite Jamieson Wellness and Doman Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jamieson Wellness position performs unexpectedly, Doman Building 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 Doman Building will offset losses from the drop in Doman Building's long position.| Jamieson Wellness vs. Enghouse Systems | Jamieson Wellness vs. Kinaxis | Jamieson Wellness vs. Waste Connections | Jamieson Wellness vs. Open Text Corp |
| Doman Building vs. Toromont Industries | Doman Building vs. Ritchie Bros Auctioneers | Doman Building vs. Stantec | Doman Building vs. Transcontinental |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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