Correlation Between IShares Physical and Jacquet Metal

Can any of the company-specific risk be diversified away by investing in both IShares Physical and Jacquet Metal 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 IShares Physical and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Physical Silver and Jacquet Metal Service, you can compare the effects of market volatilities on IShares Physical and Jacquet Metal 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 IShares Physical with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Physical and Jacquet Metal.

Diversification Opportunities for IShares Physical and Jacquet Metal

-0.19

Correlation Coefficient

IShares Physical  Jacquet Metal

Good diversification

The 3 months correlation between IShares and Jacquet is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service and IShares Physical 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 iShares Physical Silver are associated (or correlated) with Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of IShares Physical i.e., IShares Physical and Jacquet Metal go up and down completely randomly.

Pair Corralation between IShares Physical and Jacquet Metal

Assuming the 90 days trading horizon iShares Physical Silver is expected to under-perform the Jacquet Metal. But the stock apears to be less risky and, when comparing its historical volatility, iShares Physical Silver is 1.22 times less risky than Jacquet Metal. The stock trades about -0.09 of its potential returns per unit of risk. The Jacquet Metal Service is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,658  in Jacquet Metal Service on October 27, 2024 and sell it today you would lose (101.00) from holding Jacquet Metal Service or give up 6.09% of portfolio value over 90 days.

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

iShares Physical Silver  vs.  Jacquet Metal Service

iShares Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Physical Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Jacquet Metal Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jacquet Metal Service has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Jacquet Metal is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IShares Physical and Jacquet Metal

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

The idea behind iShares Physical Silver and Jacquet Metal Service 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.