Correlation Between Jacquet Metal and Linedata Services
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Linedata Services 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 Linedata Services 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 Linedata Services SA, you can compare the effects of market volatilities on Jacquet Metal and Linedata Services 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 Linedata Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Linedata Services.
Diversification Opportunities for Jacquet Metal and Linedata Services
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacquet and Linedata is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Linedata Services SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linedata Services 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 Linedata Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linedata Services has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Linedata Services go up and down completely randomly.
Pair Corralation between Jacquet Metal and Linedata Services
Assuming the 90 days trading horizon Jacquet Metal is expected to generate 1.46 times less return on investment than Linedata Services. But when comparing it to its historical volatility, Jacquet Metal Service is 1.16 times less risky than Linedata Services. It trades about 0.13 of its potential returns per unit of risk. Linedata Services SA is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,600 in Linedata Services SA on September 9, 2024 and sell it today you would earn a total of 1,400 from holding Linedata Services SA or generate 21.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Jacquet Metal Service vs. Linedata Services SA
Performance |
Timeline |
Jacquet Metal Service |
Linedata Services |
Jacquet Metal and Linedata Services Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jacquet Metal and Linedata Services
The main advantage of trading using opposite Jacquet Metal and Linedata Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Linedata Services 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 Linedata Services will offset losses from the drop in Linedata Services' long position.Jacquet Metal vs. Derichebourg | Jacquet Metal vs. Mersen SA | Jacquet Metal vs. Trigano SA | Jacquet Metal vs. Chargeurs SA |
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Check out your portfolio center.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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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