Correlation Between Western Copper and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both Western Copper and Jeld Wen 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 Western Copper and Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and Jeld Wen Holding, you can compare the effects of market volatilities on Western Copper and Jeld Wen 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 Western Copper with a short position of Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Jeld Wen.
Diversification Opportunities for Western Copper and Jeld Wen
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and Jeld is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Jeld Wen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeld Wen Holding and Western Copper 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 Western Copper and are associated (or correlated) with Jeld Wen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeld Wen Holding has no effect on the direction of Western Copper i.e., Western Copper and Jeld Wen go up and down completely randomly.
Pair Corralation between Western Copper and Jeld Wen
Considering the 90-day investment horizon Western Copper and is expected to generate 0.59 times more return on investment than Jeld Wen. However, Western Copper and is 1.68 times less risky than Jeld Wen. It trades about 0.01 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.05 per unit of risk. If you would invest 113.00 in Western Copper and on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Western Copper and or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Jeld Wen Holding
Performance |
| Timeline |
| Western Copper |
| Jeld Wen Holding |
Western Copper and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Jeld Wen
The main advantage of trading using opposite Western Copper and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Jeld Wen 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 Jeld Wen will offset losses from the drop in Jeld Wen's long position.| Western Copper vs. Vale SA ADR | Western Copper vs. BHP Group Limited | Western Copper vs. Glencore PLC ADR | Western Copper vs. Piedmont Lithium Ltd |
| Jeld Wen vs. Trex Company | Jeld Wen vs. Travis Perkins PLC | Jeld Wen vs. Janus International Group | Jeld Wen vs. Interface |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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