Correlation Between Jamieson Wellness and Precision Drilling
Can any of the company-specific risk be diversified away by investing in both Jamieson Wellness and Precision Drilling 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 Precision Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jamieson Wellness and Precision Drilling, you can compare the effects of market volatilities on Jamieson Wellness and Precision Drilling 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 Precision Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jamieson Wellness and Precision Drilling.
Diversification Opportunities for Jamieson Wellness and Precision Drilling
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jamieson and Precision is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jamieson Wellness and Precision Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precision Drilling 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 Precision Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precision Drilling has no effect on the direction of Jamieson Wellness i.e., Jamieson Wellness and Precision Drilling go up and down completely randomly.
Pair Corralation between Jamieson Wellness and Precision Drilling
Assuming the 90 days trading horizon Jamieson Wellness is expected to generate 1.19 times less return on investment than Precision Drilling. But when comparing it to its historical volatility, Jamieson Wellness is 1.51 times less risky than Precision Drilling. It trades about 0.07 of its potential returns per unit of risk. Precision Drilling is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8,329 in Precision Drilling on August 29, 2024 and sell it today you would earn a total of 342.00 from holding Precision Drilling or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jamieson Wellness vs. Precision Drilling
Performance |
| Timeline |
| Jamieson Wellness |
| Precision Drilling |
Jamieson Wellness and Precision Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jamieson Wellness and Precision Drilling
The main advantage of trading using opposite Jamieson Wellness and Precision Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jamieson Wellness position performs unexpectedly, Precision Drilling 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 Precision Drilling will offset losses from the drop in Precision Drilling's long position.| Jamieson Wellness vs. Amazon CDR | Jamieson Wellness vs. Apple Inc CDR | Jamieson Wellness vs. Alphabet Inc CDR | Jamieson Wellness vs. Walmart Inc CDR |
| Precision Drilling vs. Trican Well Service | Precision Drilling vs. Ensign Energy Services | Precision Drilling vs. Calfrac Well Services | Precision Drilling vs. Birchcliff Energy |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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