Correlation Between CVW CleanTech and Jamieson Wellness

Can any of the company-specific risk be diversified away by investing in both CVW CleanTech and Jamieson Wellness 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 CVW CleanTech and Jamieson Wellness into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CVW CleanTech and Jamieson Wellness, you can compare the effects of market volatilities on CVW CleanTech and Jamieson Wellness 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 CVW CleanTech with a short position of Jamieson Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and Jamieson Wellness.

Diversification Opportunities for CVW CleanTech and Jamieson Wellness

0.39

Correlation Coefficient

CVW CleanTech  Jamieson Wellness

Weak diversification

The 3 months correlation between CVW and Jamieson is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and Jamieson Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jamieson Wellness and CVW CleanTech 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 CVW CleanTech are associated (or correlated) with Jamieson Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jamieson Wellness has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and Jamieson Wellness go up and down completely randomly.

Pair Corralation between CVW CleanTech and Jamieson Wellness

Assuming the 90 days horizon CVW CleanTech is expected to generate 9.58 times less return on investment than Jamieson Wellness. In addition to that, CVW CleanTech is 1.26 times more volatile than Jamieson Wellness. It trades about 0.01 of its total potential returns per unit of risk. Jamieson Wellness is currently generating about 0.11 per unit of volatility. If you would invest  3,316  in Jamieson Wellness on September 17, 2024 and sell it today you would earn a total of  358.00  from holding Jamieson Wellness or generate 10.8% return on investment over 90 days.

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

CVW CleanTech  vs.  Jamieson Wellness

CVW CleanTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVW CleanTech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CVW CleanTech is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Jamieson Wellness

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jamieson Wellness are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Jamieson Wellness may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CVW CleanTech and Jamieson Wellness

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

The idea behind CVW CleanTech and Jamieson Wellness 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.