Correlation Between Stella Jones and Gildan Activewear
Can any of the company-specific risk be diversified away by investing in both Stella Jones and Gildan Activewear 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 Gildan Activewear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stella Jones and Gildan Activewear, you can compare the effects of market volatilities on Stella Jones and Gildan Activewear 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 Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Gildan Activewear.
Diversification Opportunities for Stella Jones and Gildan Activewear
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stella and Gildan is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear 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 Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Stella Jones i.e., Stella Jones and Gildan Activewear go up and down completely randomly.
Pair Corralation between Stella Jones and Gildan Activewear
Assuming the 90 days horizon Stella Jones is expected to generate 1.4 times less return on investment than Gildan Activewear. In addition to that, Stella Jones is 1.07 times more volatile than Gildan Activewear. It trades about 0.05 of its total potential returns per unit of risk. Gildan Activewear is currently generating about 0.08 per unit of volatility. If you would invest 3,772 in Gildan Activewear on August 30, 2024 and sell it today you would earn a total of 3,180 from holding Gildan Activewear or generate 84.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stella Jones vs. Gildan Activewear
Performance |
| Timeline |
| Stella Jones |
| Gildan Activewear |
Stella Jones and Gildan Activewear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stella Jones and Gildan Activewear
The main advantage of trading using opposite Stella Jones and Gildan Activewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones position performs unexpectedly, Gildan Activewear 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 Gildan Activewear will offset losses from the drop in Gildan Activewear's long position.| Stella Jones vs. Richelieu Hardware | Stella Jones vs. CCL Industries | Stella Jones vs. Stantec | Stella Jones vs. Gildan Activewear |
| Gildan Activewear vs. Saputo Inc | Gildan Activewear vs. CCL Industries | Gildan Activewear vs. Thomson Reuters Corp | Gildan Activewear vs. George Weston Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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