Correlation Between Broadpeak and Jacquet Metal

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Can any of the company-specific risk be diversified away by investing in both Broadpeak 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 Broadpeak and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadpeak SA and Jacquet Metal Service, you can compare the effects of market volatilities on Broadpeak 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 Broadpeak with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadpeak and Jacquet Metal.

Diversification Opportunities for Broadpeak and Jacquet Metal

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Broadpeak and Jacquet is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Broadpeak SA 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 Broadpeak 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 Broadpeak SA 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 Broadpeak i.e., Broadpeak and Jacquet Metal go up and down completely randomly.

Pair Corralation between Broadpeak and Jacquet Metal

Assuming the 90 days trading horizon Broadpeak SA is expected to generate 1.46 times more return on investment than Jacquet Metal. However, Broadpeak is 1.46 times more volatile than Jacquet Metal Service. It trades about 0.03 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.3 per unit of risk. If you would invest  98.00  in Broadpeak SA on October 23, 2024 and sell it today you would earn a total of  1.00  from holding Broadpeak SA or generate 1.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Broadpeak SA  vs.  Jacquet Metal Service

 Performance 
       Timeline  
Broadpeak SA 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Broadpeak SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.
Jacquet Metal Service 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jacquet Metal Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Broadpeak and Jacquet Metal Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Broadpeak and Jacquet Metal

The main advantage of trading using opposite Broadpeak and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadpeak 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.
The idea behind Broadpeak SA and Jacquet Metal Service pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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