Correlation Between Crown Holdings and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Crown Holdings 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 Crown Holdings and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Holdings and Jacquet Metal Service, you can compare the effects of market volatilities on Crown Holdings 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 Crown Holdings with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Holdings and Jacquet Metal.
Diversification Opportunities for Crown Holdings and Jacquet Metal
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Crown and Jacquet is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Crown Holdings 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 Crown Holdings 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 Crown Holdings 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 Crown Holdings i.e., Crown Holdings and Jacquet Metal go up and down completely randomly.
Pair Corralation between Crown Holdings and Jacquet Metal
Assuming the 90 days horizon Crown Holdings is expected to generate 1.36 times less return on investment than Jacquet Metal. But when comparing it to its historical volatility, Crown Holdings is 1.46 times less risky than Jacquet Metal. It trades about 0.06 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,464 in Jacquet Metal Service on November 3, 2024 and sell it today you would earn a total of 156.00 from holding Jacquet Metal Service or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Holdings vs. Jacquet Metal Service
Performance |
| Timeline |
| Crown Holdings |
| Jacquet Metal Service |
Crown Holdings and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Holdings and Jacquet Metal
The main advantage of trading using opposite Crown Holdings and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Holdings 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.| Crown Holdings vs. VIENNA INSURANCE GR | Crown Holdings vs. EIDESVIK OFFSHORE NK | Crown Holdings vs. SOLSTAD OFFSHORE NK | Crown Holdings vs. WT OFFSHORE |
| Jacquet Metal vs. ArcelorMittal SA | Jacquet Metal vs. Steel Dynamics | Jacquet Metal vs. Nippon Steel | Jacquet Metal vs. NIPPON STEEL SPADR |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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