Correlation Between Jacquet Metal and Groupe Sfpi

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

Diversification Opportunities for Jacquet Metal and Groupe Sfpi

0.13

Correlation Coefficient

Jacquet Metal  Groupe Sfpi

Average diversification

The 3 months correlation between Jacquet and Groupe is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Groupe Sfpi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Sfpi 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 Groupe Sfpi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Sfpi has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Groupe Sfpi go up and down completely randomly.

Pair Corralation between Jacquet Metal and Groupe Sfpi

Assuming the 90 days trading horizon Jacquet Metal Service is expected to generate 1.3 times more return on investment than Groupe Sfpi. However, Jacquet Metal is 1.3 times more volatile than Groupe Sfpi. It trades about 0.12 of its potential returns per unit of risk. Groupe Sfpi is currently generating about -0.05 per unit of risk. If you would invest  1,704  in Jacquet Metal Service on December 30, 2024 and sell it today you would earn a total of  292.00  from holding Jacquet Metal Service or generate 17.14% return on investment over 90 days.

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

Jacquet Metal Service  vs.  Groupe Sfpi

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 somewhat weak basic indicators, Jacquet Metal sustained solid returns over the last few months and may actually be approaching a breakup point.

Groupe Sfpi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Groupe Sfpi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Groupe Sfpi is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jacquet Metal and Groupe Sfpi

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

The idea behind Jacquet Metal Service and Groupe Sfpi 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.