Correlation Between Stella Jones and Open Text
Can any of the company-specific risk be diversified away by investing in both Stella Jones and Open Text 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 Open Text into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stella Jones and Open Text Corp, you can compare the effects of market volatilities on Stella Jones and Open Text 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 Open Text. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Open Text.
Diversification Opportunities for Stella Jones and Open Text
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stella and Open is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and Open Text Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Text Corp 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 Open Text. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Text Corp has no effect on the direction of Stella Jones i.e., Stella Jones and Open Text go up and down completely randomly.
Pair Corralation between Stella Jones and Open Text
Assuming the 90 days horizon Stella Jones is expected to generate 1.13 times more return on investment than Open Text. However, Stella Jones is 1.13 times more volatile than Open Text Corp. It trades about -0.01 of its potential returns per unit of risk. Open Text Corp is currently generating about -0.05 per unit of risk. If you would invest 7,752 in Stella Jones on August 27, 2024 and sell it today you would lose (683.00) from holding Stella Jones or give up 8.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stella Jones vs. Open Text Corp
Performance |
| Timeline |
| Stella Jones |
| Open Text Corp |
Stella Jones and Open Text Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stella Jones and Open Text
The main advantage of trading using opposite Stella Jones and Open Text positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones position performs unexpectedly, Open Text 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 Open Text will offset losses from the drop in Open Text's long position.| Stella Jones vs. Richelieu Hardware | Stella Jones vs. CCL Industries | Stella Jones vs. Stantec | Stella Jones vs. Gildan Activewear |
| Open Text vs. Slate Grocery REIT | Open Text vs. Roots Corp | Open Text vs. Aimia Inc | Open Text vs. Tucows Inc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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