Correlation Between Nature Wood and Jewett Cameron
Can any of the company-specific risk be diversified away by investing in both Nature Wood and Jewett Cameron 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 Nature Wood and Jewett Cameron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nature Wood Group and Jewett Cameron Trading, you can compare the effects of market volatilities on Nature Wood and Jewett Cameron 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 Nature Wood with a short position of Jewett Cameron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nature Wood and Jewett Cameron.
Diversification Opportunities for Nature Wood and Jewett Cameron
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nature and Jewett is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nature Wood Group and Jewett Cameron Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jewett Cameron Trading and Nature Wood 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 Nature Wood Group are associated (or correlated) with Jewett Cameron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jewett Cameron Trading has no effect on the direction of Nature Wood i.e., Nature Wood and Jewett Cameron go up and down completely randomly.
Pair Corralation between Nature Wood and Jewett Cameron
Given the investment horizon of 90 days Nature Wood Group is expected to under-perform the Jewett Cameron. In addition to that, Nature Wood is 1.65 times more volatile than Jewett Cameron Trading. It trades about -0.11 of its total potential returns per unit of risk. Jewett Cameron Trading is currently generating about 0.02 per unit of volatility. If you would invest 435.00 in Jewett Cameron Trading on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Jewett Cameron Trading or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nature Wood Group vs. Jewett Cameron Trading
Performance |
| Timeline |
| Nature Wood Group |
| Jewett Cameron Trading |
Nature Wood and Jewett Cameron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nature Wood and Jewett Cameron
The main advantage of trading using opposite Nature Wood and Jewett Cameron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nature Wood position performs unexpectedly, Jewett Cameron 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 Jewett Cameron will offset losses from the drop in Jewett Cameron's long position.| Nature Wood vs. Simpson Manufacturing | Nature Wood vs. West Fraser Timber | Nature Wood vs. Jewett Cameron Trading | Nature Wood vs. Ufp Industries |
| Jewett Cameron vs. Simpson Manufacturing | Jewett Cameron vs. West Fraser Timber | Jewett Cameron vs. Nature Wood Group | Jewett Cameron vs. Ufp Industries |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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