Correlation Between Plastic Omnium and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium 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 Plastic Omnium and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and Jacquet Metal Service, you can compare the effects of market volatilities on Plastic Omnium 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 Plastic Omnium with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and Jacquet Metal.
Diversification Opportunities for Plastic Omnium and Jacquet Metal
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Plastic and Jacquet is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium i.e., Plastic Omnium and Jacquet Metal go up and down completely randomly.
Pair Corralation between Plastic Omnium and Jacquet Metal
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 1.27 times more return on investment than Jacquet Metal. However, Plastic Omnium is 1.27 times more volatile than Jacquet Metal Service. It trades about 0.38 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.17 per unit of risk. If you would invest 823.00 in Plastic Omnium on September 24, 2024 and sell it today you would earn a total of 154.00 from holding Plastic Omnium or generate 18.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. Jacquet Metal Service
Performance |
| Timeline |
| Plastic Omnium |
| Jacquet Metal Service |
Plastic Omnium and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and Jacquet Metal
The main advantage of trading using opposite Plastic Omnium and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium 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.| Plastic Omnium vs. HANOVER INSURANCE | Plastic Omnium vs. GREENX METALS LTD | Plastic Omnium vs. Goosehead Insurance | Plastic Omnium vs. Zurich Insurance Group |
| Jacquet Metal vs. Nucor | Jacquet Metal vs. ArcelorMittal SA | Jacquet Metal vs. ArcelorMittal | Jacquet Metal vs. Steel Dynamics |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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