Correlation Between Premium Brands and Jamieson Wellness

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

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

Diversification Opportunities for Premium Brands and Jamieson Wellness

0.35

Correlation Coefficient

Premium Brands  Jamieson Wellness

Weak diversification

The 3 months correlation between Premium and Jamieson is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Premium Brands Holdings and Jamieson Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jamieson Wellness and Premium Brands 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 Premium Brands Holdings 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 Premium Brands i.e., Premium Brands and Jamieson Wellness go up and down completely randomly.

Pair Corralation between Premium Brands and Jamieson Wellness

Assuming the 90 days trading horizon Premium Brands Holdings is expected to generate 0.72 times more return on investment than Jamieson Wellness. However, Premium Brands Holdings is 1.38 times less risky than Jamieson Wellness. It trades about 0.01 of its potential returns per unit of risk. Jamieson Wellness is currently generating about -0.13 per unit of risk. If you would invest  7,815  in Premium Brands Holdings on December 30, 2024 and sell it today you would lose (2.00) from holding Premium Brands Holdings or give up 0.03% of portfolio value over 90 days.

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

Premium Brands Holdings  vs.  Jamieson Wellness

Premium Brands Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Premium Brands Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Premium Brands is not utilizing all of its potentials. The newest 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 Premium Brands and Jamieson Wellness

The main advantage of trading using opposite Premium Brands and Jamieson Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Brands 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 Premium Brands Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.