Correlation Between Jacquet Metal and Cairn Homes
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Cairn Homes 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 Cairn Homes 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 Cairn Homes PLC, you can compare the effects of market volatilities on Jacquet Metal and Cairn Homes 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 Cairn Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Cairn Homes.
Diversification Opportunities for Jacquet Metal and Cairn Homes
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jacquet and Cairn is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Cairn Homes PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairn Homes PLC 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 Cairn Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairn Homes PLC has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Cairn Homes go up and down completely randomly.
Pair Corralation between Jacquet Metal and Cairn Homes
Assuming the 90 days trading horizon Jacquet Metal is expected to generate 6.36 times less return on investment than Cairn Homes. But when comparing it to its historical volatility, Jacquet Metal Service is 1.11 times less risky than Cairn Homes. It trades about 0.02 of its potential returns per unit of risk. Cairn Homes PLC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,000 in Cairn Homes PLC on September 19, 2024 and sell it today you would earn a total of 12,060 from holding Cairn Homes PLC or generate 172.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Jacquet Metal Service vs. Cairn Homes PLC
Performance |
Timeline |
Jacquet Metal Service |
Cairn Homes PLC |
Jacquet Metal and Cairn Homes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jacquet Metal and Cairn Homes
The main advantage of trading using opposite Jacquet Metal and Cairn Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Cairn Homes 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 Cairn Homes will offset losses from the drop in Cairn Homes' 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 |
Cairn Homes vs. Home Depot | Cairn Homes vs. Weiss Korea Opportunity | Cairn Homes vs. River and Mercantile | Cairn Homes vs. Chrysalis Investments |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |