Correlation Between Jamieson Wellness and HealWELL

Can any of the company-specific risk be diversified away by investing in both Jamieson Wellness and HealWELL 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 Jamieson Wellness and HealWELL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jamieson Wellness and HealWELL AI, you can compare the effects of market volatilities on Jamieson Wellness and HealWELL 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 Jamieson Wellness with a short position of HealWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jamieson Wellness and HealWELL.

Diversification Opportunities for Jamieson Wellness and HealWELL

0.78

Correlation Coefficient

Jamieson Wellness  HealWELL

Poor diversification

The 3 months correlation between Jamieson and HealWELL is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jamieson Wellness and HealWELL AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealWELL AI and Jamieson Wellness 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 Jamieson Wellness are associated (or correlated) with HealWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealWELL AI has no effect on the direction of Jamieson Wellness i.e., Jamieson Wellness and HealWELL go up and down completely randomly.

Pair Corralation between Jamieson Wellness and HealWELL

Assuming the 90 days trading horizon Jamieson Wellness is expected to generate 0.23 times more return on investment than HealWELL. However, Jamieson Wellness is 4.42 times less risky than HealWELL. It trades about -0.27 of its potential returns per unit of risk. HealWELL AI is currently generating about -0.12 per unit of risk. If you would invest  3,676  in Jamieson Wellness on October 12, 2024 and sell it today you would lose (221.00) from holding Jamieson Wellness or give up 6.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Jamieson Wellness  vs.  HealWELL AI

Jamieson Wellness

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jamieson Wellness has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Jamieson Wellness is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

HealWELL AI

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HealWELL AI are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, HealWELL displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jamieson Wellness and HealWELL

The main advantage of trading using opposite Jamieson Wellness and HealWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jamieson Wellness position performs unexpectedly, HealWELL 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 HealWELL will offset losses from the drop in HealWELL's long position.

The idea behind Jamieson Wellness and HealWELL AI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.