Correlation Between Nature Wood and Jewett Cameron

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

By analyzing existing cross correlation between Nature Wood Group and Jewett Cameron Trading, you can compare the effects of market volatilities on Nature Wood and Jewett Cameron 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 Nature Wood with a short position of Jewett Cameron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nature Wood and Jewett Cameron.

Diversification Opportunities for Nature Wood and Jewett Cameron

0.48

Correlation Coefficient

Nature Wood  Jewett Cameron

Very weak diversification

The 3 months correlation between Nature and Jewett is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nature Wood Group and Jewett Cameron Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jewett Cameron Trading and Nature Wood 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 Nature Wood Group are associated (or correlated) with Jewett Cameron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jewett Cameron Trading has no effect on the direction of Nature Wood i.e., Nature Wood and Jewett Cameron go up and down completely randomly.

Pair Corralation between Nature Wood and Jewett Cameron

Given the investment horizon of 90 days Nature Wood Group is expected to under-perform the Jewett Cameron. In addition to that, Nature Wood is 1.68 times more volatile than Jewett Cameron Trading. It trades about -0.03 of its total potential returns per unit of risk. Jewett Cameron Trading is currently generating about -0.02 per unit of volatility. If you would invest  446.00  in Jewett Cameron Trading on September 2, 2024 and sell it today you would lose (18.00) from holding Jewett Cameron Trading or give up 4.04% of portfolio value over 90 days.

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

Nature Wood Group  vs.  Jewett Cameron Trading

Nature Wood Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nature Wood Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Jewett Cameron Trading

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jewett Cameron Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Jewett Cameron is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nature Wood and Jewett Cameron

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

The idea behind Nature Wood Group and Jewett Cameron Trading 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.