Correlation Between Wabash National and Jacquet Metal

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

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

Diversification Opportunities for Wabash National and Jacquet Metal

-0.3

Correlation Coefficient

Wabash National  Jacquet Metal

Very good diversification

The 3 months correlation between Wabash and Jacquet is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Wabash National 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 Wabash National 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 Wabash National 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 Wabash National i.e., Wabash National and Jacquet Metal go up and down completely randomly.

Pair Corralation between Wabash National and Jacquet Metal

Assuming the 90 days horizon Wabash National is expected to generate 4.39 times less return on investment than Jacquet Metal. In addition to that, Wabash National is 1.56 times more volatile than Jacquet Metal Service. It trades about 0.02 of its total potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.11 per unit of volatility. If you would invest  1,574  in Jacquet Metal Service on October 11, 2024 and sell it today you would earn a total of  156.00  from holding Jacquet Metal Service or generate 9.91% return on investment over 90 days.

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

Wabash National  vs.  Jacquet Metal Service

Wabash National

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wabash National are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Wabash National is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Jacquet Metal Service

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jacquet Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Wabash National and Jacquet Metal

The main advantage of trading using opposite Wabash National and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabash National 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 Wabash National 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.