Correlation Between Rocky Mountain and Jamieson Wellness

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

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

Diversification Opportunities for Rocky Mountain and Jamieson Wellness

-0.73

Correlation Coefficient

Rocky Mountain  Jamieson Wellness

Pay attention - limited upside

The 3 months correlation between Rocky and Jamieson is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Mountain Liquor and Jamieson Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jamieson Wellness and Rocky Mountain 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 Rocky Mountain Liquor 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 Rocky Mountain i.e., Rocky Mountain and Jamieson Wellness go up and down completely randomly.

Pair Corralation between Rocky Mountain and Jamieson Wellness

Assuming the 90 days horizon Rocky Mountain Liquor is expected to under-perform the Jamieson Wellness. In addition to that, Rocky Mountain is 3.47 times more volatile than Jamieson Wellness. It trades about -0.1 of its total potential returns per unit of risk. Jamieson Wellness is currently generating about -0.2 per unit of volatility. If you would invest  3,691  in Jamieson Wellness on October 10, 2024 and sell it today you would lose (163.00) from holding Jamieson Wellness or give up 4.42% of portfolio value over 90 days.

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

Rocky Mountain Liquor  vs.  Jamieson Wellness

Rocky Mountain Liquor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rocky Mountain Liquor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Jamieson Wellness

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jamieson Wellness are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Rocky Mountain and Jamieson Wellness

The main advantage of trading using opposite Rocky Mountain and Jamieson Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocky Mountain 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 Rocky Mountain Liquor 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.