Correlation Between Labrador Iron and Jamieson Wellness
Can any of the company-specific risk be diversified away by investing in both Labrador Iron and Jamieson Wellness 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 Labrador Iron and Jamieson Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labrador Iron Ore and Jamieson Wellness, you can compare the effects of market volatilities on Labrador Iron and Jamieson Wellness 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 Labrador Iron with a short position of Jamieson Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labrador Iron and Jamieson Wellness.
Diversification Opportunities for Labrador Iron and Jamieson Wellness
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Labrador and Jamieson is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Labrador Iron Ore and Jamieson Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jamieson Wellness and Labrador Iron 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 Labrador Iron Ore are associated (or correlated) with Jamieson Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jamieson Wellness has no effect on the direction of Labrador Iron i.e., Labrador Iron and Jamieson Wellness go up and down completely randomly.
Pair Corralation between Labrador Iron and Jamieson Wellness
Assuming the 90 days trading horizon Labrador Iron Ore is expected to under-perform the Jamieson Wellness. But the stock apears to be less risky and, when comparing its historical volatility, Labrador Iron Ore is 1.46 times less risky than Jamieson Wellness. The stock trades about -0.09 of its potential returns per unit of risk. The Jamieson Wellness is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,317 in Jamieson Wellness on September 1, 2024 and sell it today you would earn a total of 311.00 from holding Jamieson Wellness or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labrador Iron Ore vs. Jamieson Wellness
Performance |
| Timeline |
| Labrador Iron Ore |
| Jamieson Wellness |
Labrador Iron and Jamieson Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labrador Iron and Jamieson Wellness
The main advantage of trading using opposite Labrador Iron and Jamieson Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labrador Iron position performs unexpectedly, Jamieson Wellness 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 Jamieson Wellness will offset losses from the drop in Jamieson Wellness' long position.| Labrador Iron vs. Keyera Corp | Labrador Iron vs. Russel Metals | Labrador Iron vs. Freehold Royalties | Labrador Iron vs. Capital Power |
| Jamieson Wellness vs. Enghouse Systems | Jamieson Wellness vs. Kinaxis | Jamieson Wellness vs. Waste Connections | Jamieson Wellness vs. Open Text 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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