Correlation Between Catena Media and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Catena Media and Jacquet Metal 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 Catena Media and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catena Media PLC and Jacquet Metal Service, you can compare the effects of market volatilities on Catena Media and Jacquet Metal 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 Catena Media with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catena Media and Jacquet Metal.
Diversification Opportunities for Catena Media and Jacquet Metal
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catena and Jacquet is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Catena Media PLC and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service and Catena Media 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 Catena Media PLC are associated (or correlated) with Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Catena Media i.e., Catena Media and Jacquet Metal go up and down completely randomly.
Pair Corralation between Catena Media and Jacquet Metal
Assuming the 90 days trading horizon Catena Media PLC is expected to under-perform the Jacquet Metal. In addition to that, Catena Media is 2.6 times more volatile than Jacquet Metal Service. It trades about -0.08 of its total potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.02 per unit of volatility. If you would invest 1,816 in Jacquet Metal Service on September 4, 2024 and sell it today you would lose (296.00) from holding Jacquet Metal Service or give up 16.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Catena Media PLC vs. Jacquet Metal Service
Performance |
| Timeline |
| Catena Media PLC |
| Jacquet Metal Service |
Catena Media and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catena Media and Jacquet Metal
The main advantage of trading using opposite Catena Media and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catena Media position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| Catena Media vs. Samsung Electronics Co | Catena Media vs. Samsung Electronics Co | Catena Media vs. Hyundai Motor | Catena Media vs. Toyota Motor Corp |
| Jacquet Metal vs. Samsung Electronics Co | Jacquet Metal vs. Samsung Electronics Co | Jacquet Metal vs. Hyundai Motor | Jacquet Metal vs. Toyota Motor Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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