Correlation Between BROOKDALE and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both BROOKDALE 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 BROOKDALE and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROOKDALE SR LIVING and Jacquet Metal Service, you can compare the effects of market volatilities on BROOKDALE 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 BROOKDALE with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROOKDALE and Jacquet Metal.
Diversification Opportunities for BROOKDALE and Jacquet Metal
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BROOKDALE and Jacquet is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BROOKDALE SR LIVING 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 BROOKDALE 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 BROOKDALE SR LIVING 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 BROOKDALE i.e., BROOKDALE and Jacquet Metal go up and down completely randomly.
Pair Corralation between BROOKDALE and Jacquet Metal
Assuming the 90 days trading horizon BROOKDALE SR LIVING is expected to generate 0.7 times more return on investment than Jacquet Metal. However, BROOKDALE SR LIVING is 1.44 times less risky than Jacquet Metal. It trades about -0.05 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.31 per unit of risk. If you would invest 482.00 in BROOKDALE SR LIVING on October 25, 2024 and sell it today you would lose (8.00) from holding BROOKDALE SR LIVING or give up 1.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
BROOKDALE SR LIVING vs. Jacquet Metal Service
Performance |
| Timeline |
| BROOKDALE SR LIVING |
| Jacquet Metal Service |
BROOKDALE and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROOKDALE and Jacquet Metal
The main advantage of trading using opposite BROOKDALE and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROOKDALE 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.| BROOKDALE vs. Northern Data AG | BROOKDALE vs. Information Services International Dentsu | BROOKDALE vs. NORTHEAST UTILITIES | BROOKDALE vs. Kingdee International Software |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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