Correlation Between Jacquet Metal and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Scandic Hotels 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 Scandic Hotels 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 Scandic Hotels Group, you can compare the effects of market volatilities on Jacquet Metal and Scandic Hotels 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 Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Scandic Hotels.
Diversification Opportunities for Jacquet Metal and Scandic Hotels
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jacquet and Scandic is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Scandic Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandic Hotels Group 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 Scandic Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandic Hotels Group has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Scandic Hotels go up and down completely randomly.
Pair Corralation between Jacquet Metal and Scandic Hotels
Assuming the 90 days trading horizon Jacquet Metal Service is expected to generate 1.25 times more return on investment than Scandic Hotels. However, Jacquet Metal is 1.25 times more volatile than Scandic Hotels Group. It trades about 0.3 of its potential returns per unit of risk. Scandic Hotels Group is currently generating about 0.1 per unit of risk. If you would invest 1,530 in Jacquet Metal Service on September 20, 2024 and sell it today you would earn a total of 194.00 from holding Jacquet Metal Service or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Scandic Hotels Group
Performance |
| Timeline |
| Jacquet Metal Service |
| Scandic Hotels Group |
Jacquet Metal and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Scandic Hotels
The main advantage of trading using opposite Jacquet Metal and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Scandic Hotels 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 Scandic Hotels will offset losses from the drop in Scandic Hotels' long position.| Jacquet Metal vs. Samsung Electronics Co | Jacquet Metal vs. Samsung Electronics Co | Jacquet Metal vs. Hyundai Motor | Jacquet Metal vs. Reliance Industries Ltd |
| Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Hyundai Motor | Scandic Hotels vs. Reliance Industries Ltd |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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