Correlation Between Jacquet Metal and ONWARD MEDICAL

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

Diversification Opportunities for Jacquet Metal and ONWARD MEDICAL

-0.55

Correlation Coefficient

Jacquet Metal  ONWARD MEDICAL

Excellent diversification

The 3 months correlation between Jacquet and ONWARD is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and ONWARD MEDICAL go up and down completely randomly.

Pair Corralation between Jacquet Metal and ONWARD MEDICAL

Assuming the 90 days horizon Jacquet Metal Service is expected to generate 0.65 times more return on investment than ONWARD MEDICAL. However, Jacquet Metal Service is 1.54 times less risky than ONWARD MEDICAL. It trades about 0.11 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about -0.04 per unit of risk. If you would invest  1,700  in Jacquet Metal Service on December 21, 2024 and sell it today you would earn a total of  286.00  from holding Jacquet Metal Service or generate 16.82% return on investment over 90 days.

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

Jacquet Metal Service  vs.  ONWARD MEDICAL BV

Jacquet Metal Service

Risk-Adjusted Performance

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 uncertain basic indicators, Jacquet Metal reported solid returns over the last few months and may actually be approaching a breakup point.

ONWARD MEDICAL BV

Risk-Adjusted Performance

Very Weak

Over the last 90 days ONWARD MEDICAL BV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Jacquet Metal and ONWARD MEDICAL

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

The idea behind Jacquet Metal Service and ONWARD MEDICAL BV 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.