Correlation Between Jacquet Metal and PPG Industries

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

Diversification Opportunities for Jacquet Metal and PPG Industries

-0.17

Correlation Coefficient

Jacquet Metal  PPG Industries

Good diversification

The 3 months correlation between Jacquet and PPG is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries 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 PPG Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPG Industries has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and PPG Industries go up and down completely randomly.

Pair Corralation between Jacquet Metal and PPG Industries

Assuming the 90 days horizon Jacquet Metal Service is expected to generate 1.23 times more return on investment than PPG Industries. However, Jacquet Metal is 1.23 times more volatile than PPG Industries. It trades about 0.09 of its potential returns per unit of risk. PPG Industries is currently generating about -0.01 per unit of risk. If you would invest  1,474  in Jacquet Metal Service on October 8, 2024 and sell it today you would earn a total of  252.00  from holding Jacquet Metal Service or generate 17.1% 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.  PPG Industries

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 fragile basic indicators, Jacquet Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

PPG Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PPG Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PPG Industries is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Jacquet Metal and PPG Industries

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

The idea behind Jacquet Metal Service and PPG Industries 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.