Correlation Between Stella Jones and Andrew Peller

Can any of the company-specific risk be diversified away by investing in both Stella Jones and Andrew Peller 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 Stella Jones and Andrew Peller into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stella Jones and Andrew Peller Limited, you can compare the effects of market volatilities on Stella Jones and Andrew Peller 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 Stella Jones with a short position of Andrew Peller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Andrew Peller.

Diversification Opportunities for Stella Jones and Andrew Peller

0.43

Correlation Coefficient

Stella Jones  Andrew Peller

Very weak diversification

The 3 months correlation between Stella and Andrew is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and Andrew Peller Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andrew Peller Limited and Stella Jones 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 Stella Jones are associated (or correlated) with Andrew Peller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andrew Peller Limited has no effect on the direction of Stella Jones i.e., Stella Jones and Andrew Peller go up and down completely randomly.

Pair Corralation between Stella Jones and Andrew Peller

Assuming the 90 days horizon Stella Jones is expected to generate 0.67 times more return on investment than Andrew Peller. However, Stella Jones is 1.48 times less risky than Andrew Peller. It trades about -0.01 of its potential returns per unit of risk. Andrew Peller Limited is currently generating about -0.08 per unit of risk. If you would invest  7,370  in Stella Jones on October 6, 2024 and sell it today you would lose (20.00) from holding Stella Jones or give up 0.27% of portfolio value over 90 days.

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

Stella Jones  vs.  Andrew Peller Limited

Stella Jones

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stella Jones 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 February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Andrew Peller Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Andrew Peller Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Andrew Peller is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Stella Jones and Andrew Peller

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

The idea behind Stella Jones and Andrew Peller Limited 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.