Correlation Between Media and Jacquet Metal

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

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

Diversification Opportunities for Media and Jacquet Metal

0.27

Correlation Coefficient

Media  Jacquet Metal

Modest diversification

The 3 months correlation between Media and Jacquet is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games 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 Media 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 Media and Games 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 Media i.e., Media and Jacquet Metal go up and down completely randomly.

Pair Corralation between Media and Jacquet Metal

Assuming the 90 days trading horizon Media and Games is expected to under-perform the Jacquet Metal. In addition to that, Media is 2.82 times more volatile than Jacquet Metal Service. It trades about -0.09 of its total potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.18 per unit of volatility. If you would invest  1,642  in Jacquet Metal Service on August 31, 2024 and sell it today you would lose (94.00) from holding Jacquet Metal Service or give up 5.72% of portfolio value over 90 days.

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

Media and Games  vs.  Jacquet Metal Service

Media and Games

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Media and Games are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

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. Despite nearly stable basic indicators, Jacquet Metal is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Media and Jacquet Metal

The main advantage of trading using opposite Media and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media 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 Media and Games 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.