Correlation Between National Storm and Jewett Cameron

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

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

Diversification Opportunities for National Storm and Jewett Cameron

-0.81

Correlation Coefficient

National Storm  Jewett Cameron

Pay attention - limited upside

The 3 months correlation between National and Jewett is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding National Storm Recovery 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 National Storm 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 National Storm Recovery 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 National Storm i.e., National Storm and Jewett Cameron go up and down completely randomly.

Pair Corralation between National Storm and Jewett Cameron

Given the investment horizon of 90 days National Storm Recovery is expected to under-perform the Jewett Cameron. In addition to that, National Storm is 10.55 times more volatile than Jewett Cameron Trading. It trades about -0.02 of its total potential returns per unit of risk. Jewett Cameron Trading is currently generating about 0.25 per unit of volatility. If you would invest  463.00  in Jewett Cameron Trading on September 14, 2024 and sell it today you would earn a total of  26.00  from holding Jewett Cameron Trading or generate 5.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	28.57%
Values	Daily Returns

National Storm Recovery  vs.  Jewett Cameron Trading

National Storm Recovery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Storm Recovery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Jewett Cameron Trading

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Jewett Cameron Trading has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unfluctuating fundamental indicators, Jewett Cameron reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Storm and Jewett Cameron

The main advantage of trading using opposite National Storm and Jewett Cameron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storm 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 National Storm Recovery 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 Stocks Directory module to find actively traded stocks across global markets.