Correlation Between Jacquet Metal and Fortune Brands
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Fortune Brands 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 Fortune Brands 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 Fortune Brands Home, you can compare the effects of market volatilities on Jacquet Metal and Fortune Brands 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 Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Fortune Brands.
Diversification Opportunities for Jacquet Metal and Fortune Brands
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacquet and Fortune is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Fortune Brands go up and down completely randomly.
Pair Corralation between Jacquet Metal and Fortune Brands
Assuming the 90 days trading horizon Jacquet Metal Service is expected to under-perform the Fortune Brands. But the stock apears to be less risky and, when comparing its historical volatility, Jacquet Metal Service is 1.26 times less risky than Fortune Brands. The stock trades about -0.04 of its potential returns per unit of risk. The Fortune Brands Home is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 8,044 in Fortune Brands Home on August 27, 2024 and sell it today you would lose (387.00) from holding Fortune Brands Home or give up 4.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.17% |
| Values | Daily Returns |
Jacquet Metal Service vs. Fortune Brands Home
Performance |
| Timeline |
| Jacquet Metal Service |
| Fortune Brands Home |
Jacquet Metal and Fortune Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Fortune Brands
The main advantage of trading using opposite Jacquet Metal and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.| Jacquet Metal vs. Samsung Electronics Co | Jacquet Metal vs. Samsung Electronics Co | Jacquet Metal vs. Hyundai Motor | Jacquet Metal vs. Toyota Motor Corp |
| Fortune Brands vs. Alior Bank SA | Fortune Brands vs. OneSavings Bank PLC | Fortune Brands vs. Komercni Banka | Fortune Brands vs. Kaufman Et Broad |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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