Correlation Between Stella Jones and Lassonde Industries
Can any of the company-specific risk be diversified away by investing in both Stella Jones and Lassonde Industries 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 Lassonde Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stella Jones and Lassonde Industries, you can compare the effects of market volatilities on Stella Jones and Lassonde Industries 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 Lassonde Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Lassonde Industries.
Diversification Opportunities for Stella Jones and Lassonde Industries
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stella and Lassonde is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and Lassonde Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lassonde Industries 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 Lassonde Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lassonde Industries has no effect on the direction of Stella Jones i.e., Stella Jones and Lassonde Industries go up and down completely randomly.
Pair Corralation between Stella Jones and Lassonde Industries
Assuming the 90 days horizon Stella Jones is expected to under-perform the Lassonde Industries. In addition to that, Stella Jones is 1.5 times more volatile than Lassonde Industries. It trades about -0.26 of its total potential returns per unit of risk. Lassonde Industries is currently generating about 0.01 per unit of volatility. If you would invest 17,599 in Lassonde Industries on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Lassonde Industries or generate 0.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stella Jones vs. Lassonde Industries
Performance |
| Timeline |
| Stella Jones |
| Lassonde Industries |
Stella Jones and Lassonde Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stella Jones and Lassonde Industries
The main advantage of trading using opposite Stella Jones and Lassonde Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones position performs unexpectedly, Lassonde Industries 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 Lassonde Industries will offset losses from the drop in Lassonde Industries' long position.| Stella Jones vs. Richelieu Hardware | Stella Jones vs. CCL Industries | Stella Jones vs. Stantec | Stella Jones vs. Gildan Activewear |
| Lassonde Industries vs. Richelieu Hardware | Lassonde Industries vs. Stella Jones | Lassonde Industries vs. Saputo Inc | Lassonde Industries vs. High Liner Foods |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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