Correlation Between Veolia Environnement and Jacquet Metal

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

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

Diversification Opportunities for Veolia Environnement and Jacquet Metal

0.13

Correlation Coefficient

Veolia Environnement  Jacquet Metal

Average diversification

The 3 months correlation between Veolia and Jacquet is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement VE 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 Veolia Environnement 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 Veolia Environnement VE 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 Veolia Environnement i.e., Veolia Environnement and Jacquet Metal go up and down completely randomly.

Pair Corralation between Veolia Environnement and Jacquet Metal

Assuming the 90 days trading horizon Veolia Environnement is expected to generate 1.98 times less return on investment than Jacquet Metal. In addition to that, Veolia Environnement is 1.02 times more volatile than Jacquet Metal Service. It trades about 0.17 of its total potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.35 per unit of volatility. If you would invest  1,634  in Jacquet Metal Service on December 2, 2024 and sell it today you would earn a total of  148.00  from holding Jacquet Metal Service or generate 9.06% return on investment over 90 days.

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

Veolia Environnement VE  vs.  Jacquet Metal Service

Veolia Environnement

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Veolia Environnement VE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Veolia Environnement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jacquet Metal Service

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 11 (%) 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.

Pair Trading with Veolia Environnement and Jacquet Metal

The main advantage of trading using opposite Veolia Environnement and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement 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 Veolia Environnement VE 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.