Correlation Between Stella Jones and Doman Building
Can any of the company-specific risk be diversified away by investing in both Stella Jones 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 Stella Jones and Doman Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stella Jones and Doman Building Materials, you can compare the effects of market volatilities on Stella Jones 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 Stella Jones with a short position of Doman Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Doman Building.
Diversification Opportunities for Stella Jones and Doman Building
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stella and Doman is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones 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 Stella Jones 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 Stella Jones 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 Stella Jones i.e., Stella Jones and Doman Building go up and down completely randomly.
Pair Corralation between Stella Jones and Doman Building
Assuming the 90 days horizon Stella Jones is expected to generate 1.06 times more return on investment than Doman Building. However, Stella Jones is 1.06 times more volatile than Doman Building Materials. It trades about 0.05 of its potential returns per unit of risk. Doman Building Materials is currently generating about 0.04 per unit of risk. If you would invest 4,644 in Stella Jones on October 12, 2024 and sell it today you would earn a total of 2,088 from holding Stella Jones or generate 44.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stella Jones vs. Doman Building Materials
Performance |
| Timeline |
| Stella Jones |
| Doman Building Materials |
Stella Jones and Doman Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stella Jones and Doman Building
The main advantage of trading using opposite Stella Jones and Doman Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones 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.| Stella Jones vs. Richelieu Hardware | Stella Jones vs. CCL Industries | Stella Jones vs. Stantec | Stella Jones vs. Gildan Activewear |
| Doman Building vs. ATS P | Doman Building vs. Richelieu Hardware | Doman Building vs. West Fraser Timber | Doman Building vs. Brookfield |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |