Correlation Between Worthington Steel and Jewett Cameron

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

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

Diversification Opportunities for Worthington Steel and Jewett Cameron

0.38

Correlation Coefficient

Worthington Steel  Jewett Cameron

Weak diversification

The 3 months correlation between Worthington and Jewett is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel 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 Worthington Steel 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 Worthington Steel 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 Worthington Steel i.e., Worthington Steel and Jewett Cameron go up and down completely randomly.

Pair Corralation between Worthington Steel and Jewett Cameron

Allowing for the 90-day total investment horizon Worthington Steel is expected to under-perform the Jewett Cameron. But the stock apears to be less risky and, when comparing its historical volatility, Worthington Steel is 1.41 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 0.06 of returns per unit of risk over similar time horizon. If you would invest  421.00  in Jewett Cameron Trading on December 30, 2024 and sell it today you would earn a total of  39.00  from holding Jewett Cameron Trading or generate 9.26% return on investment over 90 days.

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

Worthington Steel  vs.  Jewett Cameron Trading

Worthington Steel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Worthington Steel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Jewett Cameron Trading

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jewett Cameron Trading are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Jewett Cameron exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Worthington Steel and Jewett Cameron

The main advantage of trading using opposite Worthington Steel and Jewett Cameron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worthington Steel 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 Worthington Steel 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.