Correlation Between Jacquet Metal and Walmart

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

Diversification Opportunities for Jacquet Metal and Walmart

-0.61

Correlation Coefficient

Jacquet Metal  Walmart

Excellent diversification

The 3 months correlation between Jacquet and Walmart is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Walmart go up and down completely randomly.

Pair Corralation between Jacquet Metal and Walmart

Assuming the 90 days horizon Jacquet Metal Service is expected to generate 1.48 times more return on investment than Walmart. However, Jacquet Metal is 1.48 times more volatile than Walmart. It trades about 0.12 of its potential returns per unit of risk. Walmart is currently generating about -0.09 per unit of risk. If you would invest  1,720  in Jacquet Metal Service on December 30, 2024 and sell it today you would earn a total of  330.00  from holding Jacquet Metal Service or generate 19.19% return on investment over 90 days.

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

Jacquet Metal Service  vs.  Walmart

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 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Jacquet Metal reported solid returns over the last few months and may actually be approaching a breakup point.

Walmart

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walmart has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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 Walmart

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

The idea behind Jacquet Metal Service and Walmart 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.