Correlation Between Jacquet Metal and Industrias Penoles

Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Industrias Penoles 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 Industrias Penoles 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 Industrias Penoles Sab, you can compare the effects of market volatilities on Jacquet Metal and Industrias Penoles 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 Industrias Penoles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Industrias Penoles.

Diversification Opportunities for Jacquet Metal and Industrias Penoles

-0.29

Correlation Coefficient

Jacquet Metal  Industrias Penoles

Very good diversification

The 3 months correlation between Jacquet and Industrias is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Industrias Penoles Sab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrias Penoles Sab 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 Industrias Penoles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrias Penoles Sab has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Industrias Penoles go up and down completely randomly.

Pair Corralation between Jacquet Metal and Industrias Penoles

Assuming the 90 days horizon Jacquet Metal is expected to generate 1.93 times less return on investment than Industrias Penoles. But when comparing it to its historical volatility, Jacquet Metal Service is 1.86 times less risky than Industrias Penoles. It trades about 0.02 of its potential returns per unit of risk. Industrias Penoles Sab is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,400  in Industrias Penoles Sab on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Industrias Penoles Sab or generate 0.0% return on investment over 90 days.

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

Jacquet Metal Service  vs.  Industrias Penoles Sab

Jacquet Metal Service

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Jacquet Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Industrias Penoles Sab

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Industrias Penoles Sab are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Industrias Penoles reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jacquet Metal and Industrias Penoles

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

The idea behind Jacquet Metal Service and Industrias Penoles Sab 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.