Correlation Between SBA Communications and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both SBA Communications 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 SBA Communications and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBA Communications Corp and Jacquet Metal Service, you can compare the effects of market volatilities on SBA Communications 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 SBA Communications with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBA Communications and Jacquet Metal.
Diversification Opportunities for SBA Communications and Jacquet Metal
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between SBA and Jacquet is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SBA Communications Corp 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 SBA Communications 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 SBA Communications Corp 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 SBA Communications i.e., SBA Communications and Jacquet Metal go up and down completely randomly.
Pair Corralation between SBA Communications and Jacquet Metal
Assuming the 90 days trading horizon SBA Communications Corp is expected to generate 1.06 times more return on investment than Jacquet Metal. However, SBA Communications is 1.06 times more volatile than Jacquet Metal Service. It trades about 0.09 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.04 per unit of risk. If you would invest 17,934 in SBA Communications Corp on August 31, 2024 and sell it today you would earn a total of 3,646 from holding SBA Communications Corp or generate 20.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
SBA Communications Corp vs. Jacquet Metal Service
Performance |
| Timeline |
| SBA Communications Corp |
| Jacquet Metal Service |
SBA Communications and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBA Communications and Jacquet Metal
The main advantage of trading using opposite SBA Communications and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBA Communications 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.| SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc | SBA Communications vs. Apple Inc |
| Jacquet Metal vs. Tsingtao Brewery | Jacquet Metal vs. BJs Restaurants | Jacquet Metal vs. GungHo Online Entertainment | Jacquet Metal vs. Thai Beverage Public |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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