Correlation Between Jacquet Metal and Future Metals

Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Future Metals 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 Jacquet Metal and Future Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jacquet Metal Service and Future Metals NL, you can compare the effects of market volatilities on Jacquet Metal and Future Metals 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 Jacquet Metal with a short position of Future Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Future Metals.

Diversification Opportunities for Jacquet Metal and Future Metals

0.5

Correlation Coefficient

Jacquet Metal  Future Metals

Very weak diversification

The 3 months correlation between Jacquet and Future is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Future Metals NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Metals NL and Jacquet Metal 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 Jacquet Metal Service are associated (or correlated) with Future Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Metals NL has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Future Metals go up and down completely randomly.

Pair Corralation between Jacquet Metal and Future Metals

Assuming the 90 days trading horizon Jacquet Metal is expected to generate 2.35 times less return on investment than Future Metals. But when comparing it to its historical volatility, Jacquet Metal Service is 1.74 times less risky than Future Metals. It trades about 0.03 of its potential returns per unit of risk. Future Metals NL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Future Metals NL on September 2, 2024 and sell it today you would earn a total of  5.00  from holding Future Metals NL or generate 5.56% return on investment over 90 days.

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

Jacquet Metal Service  vs.  Future Metals NL

Jacquet Metal Service

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Jacquet Metal is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Future Metals NL

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Future Metals NL are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Future Metals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jacquet Metal and Future Metals

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

The idea behind Jacquet Metal Service and Future Metals NL 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.