Correlation Between KION Group and Jacquet Metal

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

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

Diversification Opportunities for KION Group and Jacquet Metal

-0.25

Correlation Coefficient

KION Group  Jacquet Metal

Very good diversification

The 3 months correlation between KION and Jacquet is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding KION Group AG 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 KION Group 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 KION Group AG 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 KION Group i.e., KION Group and Jacquet Metal go up and down completely randomly.

Pair Corralation between KION Group and Jacquet Metal

Assuming the 90 days horizon KION Group AG is expected to under-perform the Jacquet Metal. In addition to that, KION Group is 1.55 times more volatile than Jacquet Metal Service. It trades about -0.07 of its total potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.05 per unit of volatility. If you would invest  1,628  in Jacquet Metal Service on September 30, 2024 and sell it today you would earn a total of  62.00  from holding Jacquet Metal Service or generate 3.81% return on investment over 90 days.

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

KION Group AG  vs.  Jacquet Metal Service

KION Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KION Group AG 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.

Jacquet Metal Service

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Jacquet Metal is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KION Group and Jacquet Metal

The main advantage of trading using opposite KION Group and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KION Group 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 KION Group AG 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.