Correlation Between Labrador Iron and Jamieson Wellness

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

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

Diversification Opportunities for Labrador Iron and Jamieson Wellness

-0.37

Correlation Coefficient

Labrador Iron  Jamieson Wellness

Very good diversification

The 3 months correlation between Labrador and Jamieson is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Labrador Iron Ore and Jamieson Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jamieson Wellness and Labrador Iron 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 Labrador Iron Ore are associated (or correlated) with Jamieson Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jamieson Wellness has no effect on the direction of Labrador Iron i.e., Labrador Iron and Jamieson Wellness go up and down completely randomly.

Pair Corralation between Labrador Iron and Jamieson Wellness

Assuming the 90 days trading horizon Labrador Iron Ore is expected to generate 0.53 times more return on investment than Jamieson Wellness. However, Labrador Iron Ore is 1.88 times less risky than Jamieson Wellness. It trades about 0.07 of its potential returns per unit of risk. Jamieson Wellness is currently generating about -0.16 per unit of risk. If you would invest  2,901  in Labrador Iron Ore on December 24, 2024 and sell it today you would earn a total of  115.00  from holding Labrador Iron Ore or generate 3.96% return on investment over 90 days.

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

Labrador Iron Ore  vs.  Jamieson Wellness

Labrador Iron Ore

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Labrador Iron Ore are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Labrador Iron is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Jamieson Wellness

Risk-Adjusted Performance

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Labrador Iron and Jamieson Wellness

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

The idea behind Labrador Iron Ore and Jamieson Wellness 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..