Correlation Between West Fraser and Jewett Cameron

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

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

Diversification Opportunities for West Fraser and Jewett Cameron

0.42

Correlation Coefficient

West Fraser  Jewett Cameron

Very weak diversification

The 3 months correlation between West and Jewett is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding West Fraser Timber 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 West Fraser 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 West Fraser Timber 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 West Fraser i.e., West Fraser and Jewett Cameron go up and down completely randomly.

Pair Corralation between West Fraser and Jewett Cameron

Considering the 90-day investment horizon West Fraser Timber is expected to under-perform the Jewett Cameron. But the stock apears to be less risky and, when comparing its historical volatility, West Fraser Timber is 2.35 times less risky than Jewett Cameron. The stock trades about -0.11 of its potential returns per unit of risk. The Jewett Cameron Trading is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  421.00  in Jewett Cameron Trading on December 28, 2024 and sell it today you would earn a total of  29.00  from holding Jewett Cameron Trading or generate 6.89% return on investment over 90 days.

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

West Fraser Timber  vs.  Jewett Cameron Trading

West Fraser Timber

Risk-Adjusted Performance

Very Weak

Over the last 90 days West Fraser Timber 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 stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Jewett Cameron Trading

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jewett Cameron Trading are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Jewett Cameron may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with West Fraser and Jewett Cameron

The main advantage of trading using opposite West Fraser and Jewett Cameron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if West Fraser 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 West Fraser Timber 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.