Correlation Between Jamieson Wellness and NextSource Materials
Can any of the company-specific risk be diversified away by investing in both Jamieson Wellness and NextSource Materials 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 NextSource Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jamieson Wellness and NextSource Materials, you can compare the effects of market volatilities on Jamieson Wellness and NextSource Materials 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 NextSource Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jamieson Wellness and NextSource Materials.
Diversification Opportunities for Jamieson Wellness and NextSource Materials
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jamieson and NextSource is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jamieson Wellness and NextSource Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextSource 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 NextSource Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextSource Materials has no effect on the direction of Jamieson Wellness i.e., Jamieson Wellness and NextSource Materials go up and down completely randomly.
Pair Corralation between Jamieson Wellness and NextSource Materials
Assuming the 90 days trading horizon Jamieson Wellness is expected to under-perform the NextSource Materials. But the stock apears to be less risky and, when comparing its historical volatility, Jamieson Wellness is 4.23 times less risky than NextSource Materials. The stock trades about -0.17 of its potential returns per unit of risk. The NextSource Materials is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 80.00 in NextSource Materials on October 25, 2024 and sell it today you would earn a total of 8.00 from holding NextSource Materials or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jamieson Wellness vs. NextSource Materials
Performance |
| Timeline |
| Jamieson Wellness |
| NextSource Materials |
Jamieson Wellness and NextSource Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jamieson Wellness and NextSource Materials
The main advantage of trading using opposite Jamieson Wellness and NextSource Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jamieson Wellness position performs unexpectedly, NextSource Materials 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 NextSource Materials will offset losses from the drop in NextSource Materials' long position.| Jamieson Wellness vs. Enghouse Systems | Jamieson Wellness vs. Kinaxis | Jamieson Wellness vs. Waste Connections | Jamieson Wellness vs. Open Text Corp |
| NextSource Materials vs. Leading Edge Materials | NextSource Materials vs. Northern Graphite | NextSource Materials vs. Lomiko Metals | NextSource Materials vs. Elcora Advanced Materials |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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