Correlation Between Jacquet Metal and MidCap Financial
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and MidCap Financial 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 Jacquet Metal and MidCap Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacquet Metal Service and MidCap Financial Investment, you can compare the effects of market volatilities on Jacquet Metal and MidCap Financial 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 Jacquet Metal with a short position of MidCap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and MidCap Financial.
Diversification Opportunities for Jacquet Metal and MidCap Financial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jacquet and MidCap is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and MidCap Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MidCap Financial Inv and Jacquet Metal 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 Jacquet Metal Service are associated (or correlated) with MidCap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MidCap Financial Inv has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and MidCap Financial go up and down completely randomly.
Pair Corralation between Jacquet Metal and MidCap Financial
Assuming the 90 days horizon Jacquet Metal Service is expected to generate 1.66 times more return on investment than MidCap Financial. However, Jacquet Metal is 1.66 times more volatile than MidCap Financial Investment. It trades about 0.18 of its potential returns per unit of risk. MidCap Financial Investment is currently generating about -0.1 per unit of risk. If you would invest 1,644 in Jacquet Metal Service on October 12, 2024 and sell it today you would earn a total of 86.00 from holding Jacquet Metal Service or generate 5.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. MidCap Financial Investment
Performance |
| Timeline |
| Jacquet Metal Service |
| MidCap Financial Inv |
Jacquet Metal and MidCap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and MidCap Financial
The main advantage of trading using opposite Jacquet Metal and MidCap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, MidCap Financial 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 MidCap Financial will offset losses from the drop in MidCap Financial's long position.| Jacquet Metal vs. Taiwan Semiconductor Manufacturing | Jacquet Metal vs. Nordic Semiconductor ASA | Jacquet Metal vs. Nomad Foods | Jacquet Metal vs. NAKED WINES PLC |
| MidCap Financial vs. Jacquet Metal Service | MidCap Financial vs. Digilife Technologies Limited | MidCap Financial vs. Minerals Technologies | MidCap Financial vs. BioNTech SE |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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