Correlation Between United States and Jewett Cameron

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

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

Diversification Opportunities for United States and Jewett Cameron

-0.41

Correlation Coefficient

United States  Jewett Cameron

Very good diversification

The 3 months correlation between United and Jewett is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding United States 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 United States 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 United States 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 United States i.e., United States and Jewett Cameron go up and down completely randomly.

Pair Corralation between United States and Jewett Cameron

Taking into account the 90-day investment horizon United States is expected to generate 1.98 times less return on investment than Jewett Cameron. In addition to that, United States is 1.5 times more volatile than Jewett Cameron Trading. It trades about 0.05 of its total potential returns per unit of risk. Jewett Cameron Trading is currently generating about 0.15 per unit of volatility. If you would invest  418.00  in Jewett Cameron Trading on August 30, 2024 and sell it today you would earn a total of  30.00  from holding Jewett Cameron Trading or generate 7.18% return on investment over 90 days.

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

United States Steel  vs.  Jewett Cameron Trading

United States Steel

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in United States Steel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, United States may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Jewett Cameron Trading

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jewett Cameron Trading has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Jewett Cameron is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with United States and Jewett Cameron

The main advantage of trading using opposite United States and Jewett Cameron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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 United States 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.