Correlation Between Stella Jones and Buhler Industries
Can any of the company-specific risk be diversified away by investing in both Stella Jones and Buhler Industries 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 Stella Jones and Buhler Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stella Jones and Buhler Industries, you can compare the effects of market volatilities on Stella Jones and Buhler Industries 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 Stella Jones with a short position of Buhler Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Buhler Industries.
Diversification Opportunities for Stella Jones and Buhler Industries
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stella and Buhler is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and Buhler Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buhler Industries and Stella Jones 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 Stella Jones are associated (or correlated) with Buhler Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buhler Industries has no effect on the direction of Stella Jones i.e., Stella Jones and Buhler Industries go up and down completely randomly.
Pair Corralation between Stella Jones and Buhler Industries
Assuming the 90 days horizon Stella Jones is expected to under-perform the Buhler Industries. But the stock apears to be less risky and, when comparing its historical volatility, Stella Jones is 1.21 times less risky than Buhler Industries. The stock trades about -0.15 of its potential returns per unit of risk. The Buhler Industries is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 240.00 in Buhler Industries on September 25, 2024 and sell it today you would earn a total of 48.00 from holding Buhler Industries or generate 20.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Stella Jones vs. Buhler Industries
Performance |
Timeline |
Stella Jones |
Buhler Industries |
Stella Jones and Buhler Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stella Jones and Buhler Industries
The main advantage of trading using opposite Stella Jones and Buhler Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones position performs unexpectedly, Buhler Industries 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 Buhler Industries will offset losses from the drop in Buhler Industries' long position.Stella Jones vs. Algoma Central | Stella Jones vs. Taiga Building Products | Stella Jones vs. Conifex Timber | Stella Jones vs. High Liner Foods |
Buhler Industries vs. Exchange Income | Buhler Industries vs. Stella Jones | Buhler Industries vs. Superior Plus Corp | Buhler Industries vs. NFI Group |
Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |