Correlation Between Jacquet Metal and British American
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and British American 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 British American 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 British American Tobacco, you can compare the effects of market volatilities on Jacquet Metal and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and British American.
Diversification Opportunities for Jacquet Metal and British American
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jacquet and British is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and British American go up and down completely randomly.
Pair Corralation between Jacquet Metal and British American
Assuming the 90 days trading horizon Jacquet Metal is expected to generate 1.98 times less return on investment than British American. But when comparing it to its historical volatility, Jacquet Metal Service is 1.51 times less risky than British American. It trades about 0.02 of its potential returns per unit of risk. British American Tobacco is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,164 in British American Tobacco on October 16, 2024 and sell it today you would earn a total of 403.00 from holding British American Tobacco or generate 12.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Jacquet Metal Service vs. British American Tobacco
Performance |
| Timeline |
| Jacquet Metal Service |
| British American Tobacco |
Jacquet Metal and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and British American
The main advantage of trading using opposite Jacquet Metal and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| Jacquet Metal vs. EJF Investments | Jacquet Metal vs. Optima Health plc | Jacquet Metal vs. Canadian General Investments | Jacquet Metal vs. Cardinal Health |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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