Correlation Between Jacquet Metal and John Wood
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and John Wood 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 John Wood 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 John Wood Group, you can compare the effects of market volatilities on Jacquet Metal and John Wood 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 John Wood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and John Wood.
Diversification Opportunities for Jacquet Metal and John Wood
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jacquet and John is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and John Wood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Wood 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 John Wood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Wood Group has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and John Wood go up and down completely randomly.
Pair Corralation between Jacquet Metal and John Wood
Assuming the 90 days trading horizon Jacquet Metal Service is expected to generate 0.27 times more return on investment than John Wood. However, Jacquet Metal Service is 3.74 times less risky than John Wood. It trades about -0.05 of its potential returns per unit of risk. John Wood Group is currently generating about -0.07 per unit of risk. If you would invest 1,877 in Jacquet Metal Service on September 3, 2024 and sell it today you would lose (277.00) from holding Jacquet Metal Service or give up 14.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. John Wood Group
Performance |
| Timeline |
| Jacquet Metal Service |
| John Wood Group |
Jacquet Metal and John Wood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and John Wood
The main advantage of trading using opposite Jacquet Metal and John Wood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, John Wood 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 John Wood will offset losses from the drop in John Wood's long position.| Jacquet Metal vs. Liberty Media Corp | Jacquet Metal vs. International Biotechnology Trust | Jacquet Metal vs. Solstad Offshore ASA | Jacquet Metal vs. Catena Media PLC |
| John Wood vs. Charter Communications Cl | John Wood vs. Jacquet Metal Service | John Wood vs. Blackrock World Mining | John Wood vs. Spirent Communications plc |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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