Correlation Between Jacquet Metal and Direct Line
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Direct Line 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 Direct Line 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 Direct Line Insurance, you can compare the effects of market volatilities on Jacquet Metal and Direct Line 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 Direct Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Direct Line.
Diversification Opportunities for Jacquet Metal and Direct Line
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jacquet and Direct is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Direct Line Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Line Insurance 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 Direct Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Line Insurance has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Direct Line go up and down completely randomly.
Pair Corralation between Jacquet Metal and Direct Line
Assuming the 90 days trading horizon Jacquet Metal Service is expected to under-perform the Direct Line. But the stock apears to be less risky and, when comparing its historical volatility, Jacquet Metal Service is 2.06 times less risky than Direct Line. The stock trades about -0.01 of its potential returns per unit of risk. The Direct Line Insurance is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 15,994 in Direct Line Insurance on September 2, 2024 and sell it today you would earn a total of 7,486 from holding Direct Line Insurance or generate 46.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Direct Line Insurance
Performance |
| Timeline |
| Jacquet Metal Service |
| Direct Line Insurance |
Jacquet Metal and Direct Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Direct Line
The main advantage of trading using opposite Jacquet Metal and Direct Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Direct Line 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 Direct Line will offset losses from the drop in Direct Line's long position.| Jacquet Metal vs. Zurich Insurance Group | Jacquet Metal vs. TR Property Investment | Jacquet Metal vs. Verizon Communications | Jacquet Metal vs. Air Products Chemicals |
| Direct Line vs. Gaztransport et Technigaz | Direct Line vs. International Biotechnology Trust | Direct Line vs. DXC Technology Co | Direct Line vs. Spotify Technology SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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