Correlation Between Jacquet Metal and London Security
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and London Security 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 London Security 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 London Security Plc, you can compare the effects of market volatilities on Jacquet Metal and London Security 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 London Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and London Security.
Diversification Opportunities for Jacquet Metal and London Security
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jacquet and London is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and London Security Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on London Security 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 London Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of London Security Plc has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and London Security go up and down completely randomly.
Pair Corralation between Jacquet Metal and London Security
Assuming the 90 days trading horizon Jacquet Metal is expected to generate 1.88 times less return on investment than London Security. In addition to that, Jacquet Metal is 1.05 times more volatile than London Security Plc. It trades about 0.02 of its total potential returns per unit of risk. London Security Plc is currently generating about 0.03 per unit of volatility. If you would invest 282,151 in London Security Plc on October 16, 2024 and sell it today you would earn a total of 57,849 from holding London Security Plc or generate 20.5% 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. London Security Plc
Performance |
| Timeline |
| Jacquet Metal Service |
| London Security Plc |
Jacquet Metal and London Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and London Security
The main advantage of trading using opposite Jacquet Metal and London Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, London Security 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 London Security will offset losses from the drop in London Security's long position.| Jacquet Metal vs. Panther Metals PLC | Jacquet Metal vs. Cornish Metals | Jacquet Metal vs. BE Semiconductor Industries | Jacquet Metal vs. AMG Advanced Metallurgical |
| London Security vs. Jacquet Metal Service | London Security vs. MediaZest plc | London Security vs. Catalyst Media Group | London Security vs. Centaur Media |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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