Correlation Between Jamieson Wellness and S A P

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

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

Diversification Opportunities for Jamieson Wellness and S A P

-0.44

Correlation Coefficient

Jamieson Wellness  S A P

Very good diversification

The 3 months correlation between Jamieson and SAP is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Jamieson Wellness and Saputo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saputo Inc and Jamieson Wellness 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 Jamieson Wellness are associated (or correlated) with S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saputo Inc has no effect on the direction of Jamieson Wellness i.e., Jamieson Wellness and S A P go up and down completely randomly.

Pair Corralation between Jamieson Wellness and S A P

Assuming the 90 days trading horizon Jamieson Wellness is expected to generate 1.04 times more return on investment than S A P. However, Jamieson Wellness is 1.04 times more volatile than Saputo Inc. It trades about 0.01 of its potential returns per unit of risk. Saputo Inc is currently generating about -0.15 per unit of risk. If you would invest  3,639  in Jamieson Wellness on September 26, 2024 and sell it today you would earn a total of  7.00  from holding Jamieson Wellness or generate 0.19% return on investment over 90 days.

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

Jamieson Wellness  vs.  Saputo Inc

Jamieson Wellness

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jamieson Wellness are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Jamieson Wellness is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Saputo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saputo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Jamieson Wellness and S A P

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

The idea behind Jamieson Wellness and Saputo Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.