Correlation Between AIR PRODCHEMICALS and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Jacquet Metal Service, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Jacquet Metal.
Diversification Opportunities for AIR PRODCHEMICALS and Jacquet Metal
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AIR and Jacquet is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Jacquet Metal go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Jacquet Metal
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 1.0 times more return on investment than Jacquet Metal. However, AIR PRODCHEMICALS is 1.0 times more volatile than Jacquet Metal Service. It trades about 0.05 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.01 per unit of risk. If you would invest 24,909 in AIR PRODCHEMICALS on September 4, 2024 and sell it today you would earn a total of 6,721 from holding AIR PRODCHEMICALS or generate 26.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Jacquet Metal Service
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Jacquet Metal Service |
AIR PRODCHEMICALS and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Jacquet Metal
The main advantage of trading using opposite AIR PRODCHEMICALS and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. TOTAL GABON | AIR PRODCHEMICALS vs. Walgreens Boots Alliance | AIR PRODCHEMICALS vs. Peak Resources Limited |
| Jacquet Metal vs. HF SINCLAIR P | Jacquet Metal vs. Enter Air SA | Jacquet Metal vs. FUYO GENERAL LEASE | Jacquet Metal vs. Autohome ADR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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