Correlation Between Goodfellow and Wajax
Can any of the company-specific risk be diversified away by investing in both Goodfellow and Wajax 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 Goodfellow and Wajax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodfellow and Wajax, you can compare the effects of market volatilities on Goodfellow and Wajax 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 Goodfellow with a short position of Wajax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodfellow and Wajax.
Diversification Opportunities for Goodfellow and Wajax
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goodfellow and Wajax is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Goodfellow and Wajax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wajax and Goodfellow 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 Goodfellow are associated (or correlated) with Wajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wajax has no effect on the direction of Goodfellow i.e., Goodfellow and Wajax go up and down completely randomly.
Pair Corralation between Goodfellow and Wajax
Assuming the 90 days trading horizon Goodfellow is expected to generate 5.72 times less return on investment than Wajax. But when comparing it to its historical volatility, Goodfellow is 1.16 times less risky than Wajax. It trades about 0.05 of its potential returns per unit of risk. Wajax is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,713 in Wajax on April 24, 2025 and sell it today you would earn a total of 623.00 from holding Wajax or generate 36.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Goodfellow vs. Wajax
Performance |
Timeline |
Goodfellow |
Wajax |
Goodfellow and Wajax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goodfellow and Wajax
The main advantage of trading using opposite Goodfellow and Wajax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodfellow position performs unexpectedly, Wajax 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 Wajax will offset losses from the drop in Wajax's long position.Goodfellow vs. Algoma Central | Goodfellow vs. Taiga Building Products | Goodfellow vs. Conifex Timber | Goodfellow vs. Acadian Timber Corp |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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