Correlation Between ENSTAR GROUP and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both ENSTAR GROUP 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 ENSTAR GROUP and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENSTAR GROUP LTD and Jacquet Metal Service, you can compare the effects of market volatilities on ENSTAR GROUP 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 ENSTAR GROUP with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENSTAR GROUP and Jacquet Metal.
Diversification Opportunities for ENSTAR GROUP and Jacquet Metal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ENSTAR and Jacquet is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ENSTAR GROUP LTD 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 ENSTAR GROUP 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 ENSTAR GROUP LTD 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 ENSTAR GROUP i.e., ENSTAR GROUP and Jacquet Metal go up and down completely randomly.
Pair Corralation between ENSTAR GROUP and Jacquet Metal
Assuming the 90 days horizon ENSTAR GROUP LTD is expected to generate 0.63 times more return on investment than Jacquet Metal. However, ENSTAR GROUP LTD is 1.58 times less risky than Jacquet Metal. It trades about 0.08 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.06 per unit of risk. If you would invest 29,400 in ENSTAR GROUP LTD on September 4, 2024 and sell it today you would earn a total of 400.00 from holding ENSTAR GROUP LTD or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENSTAR GROUP LTD vs. Jacquet Metal Service
Performance |
| Timeline |
| ENSTAR GROUP LTD |
| Jacquet Metal Service |
ENSTAR GROUP and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENSTAR GROUP and Jacquet Metal
The main advantage of trading using opposite ENSTAR GROUP and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENSTAR GROUP 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.| ENSTAR GROUP vs. NISSIN FOODS HLDGS | ENSTAR GROUP vs. Big 5 Sporting | ENSTAR GROUP vs. Astral Foods Limited | ENSTAR GROUP vs. EBRO FOODS |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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