Correlation Between Jacquet Metal and Warehouses

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

Diversification Opportunities for Jacquet Metal and Warehouses

-0.16

Correlation Coefficient

Jacquet Metal  Warehouses

Good diversification

The 3 months correlation between Jacquet and Warehouses is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Warehouses De Pauw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warehouses De Pauw 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 Warehouses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warehouses De Pauw has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Warehouses go up and down completely randomly.

Pair Corralation between Jacquet Metal and Warehouses

Assuming the 90 days horizon Jacquet Metal Service is expected to generate 1.19 times more return on investment than Warehouses. However, Jacquet Metal is 1.19 times more volatile than Warehouses De Pauw. It trades about 0.0 of its potential returns per unit of risk. Warehouses De Pauw is currently generating about -0.08 per unit of risk. If you would invest  1,807  in Jacquet Metal Service on October 17, 2024 and sell it today you would lose (87.00) from holding Jacquet Metal Service or give up 4.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.56%
Values	Daily Returns

Jacquet Metal Service  vs.  Warehouses De Pauw

Jacquet Metal Service

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 7 (%) 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.

Warehouses De Pauw

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Warehouses De Pauw has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Jacquet Metal and Warehouses

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

The idea behind Jacquet Metal Service and Warehouses De Pauw 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.