Correlation Between SANOK RUBBER and Jacquet Metal

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

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

Diversification Opportunities for SANOK RUBBER and Jacquet Metal

0.54

Correlation Coefficient

SANOK RUBBER  Jacquet Metal

Very weak diversification

The 3 months correlation between SANOK and Jacquet is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service and SANOK RUBBER 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 SANOK RUBBER ZY are associated (or correlated) with Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and Jacquet Metal go up and down completely randomly.

Pair Corralation between SANOK RUBBER and Jacquet Metal

Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 1.64 times more return on investment than Jacquet Metal. However, SANOK RUBBER is 1.64 times more volatile than Jacquet Metal Service. It trades about 0.09 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.01 per unit of risk. If you would invest  182.00  in SANOK RUBBER ZY on October 6, 2024 and sell it today you would earn a total of  340.00  from holding SANOK RUBBER ZY or generate 186.81% return on investment over 90 days.

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

SANOK RUBBER ZY  vs.  Jacquet Metal Service

SANOK RUBBER ZY

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, SANOK RUBBER reported solid returns over the last few months and may actually be approaching a breakup point.

Jacquet Metal Service

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jacquet Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SANOK RUBBER and Jacquet Metal

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

The idea behind SANOK RUBBER ZY and Jacquet Metal Service 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.