Correlation Between Jacquet Metal and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and ALGOMA STEEL 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 ALGOMA STEEL 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 ALGOMA STEEL GROUP, you can compare the effects of market volatilities on Jacquet Metal and ALGOMA STEEL 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 ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and ALGOMA STEEL.
Diversification Opportunities for Jacquet Metal and ALGOMA STEEL
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jacquet and ALGOMA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and ALGOMA STEEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALGOMA STEEL GROUP 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 ALGOMA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALGOMA STEEL GROUP has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between Jacquet Metal and ALGOMA STEEL
Assuming the 90 days horizon Jacquet Metal Service is expected to under-perform the ALGOMA STEEL. But the stock apears to be less risky and, when comparing its historical volatility, Jacquet Metal Service is 2.16 times less risky than ALGOMA STEEL. The stock trades about -0.1 of its potential returns per unit of risk. The ALGOMA STEEL GROUP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 965.00 in ALGOMA STEEL GROUP on September 1, 2024 and sell it today you would earn a total of 35.00 from holding ALGOMA STEEL GROUP or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. ALGOMA STEEL GROUP
Performance |
| Timeline |
| Jacquet Metal Service |
| ALGOMA STEEL GROUP |
Jacquet Metal and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and ALGOMA STEEL
The main advantage of trading using opposite Jacquet Metal and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, ALGOMA STEEL 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 ALGOMA STEEL will offset losses from the drop in ALGOMA STEEL's long position.| Jacquet Metal vs. BORR DRILLING NEW | Jacquet Metal vs. Carsales | Jacquet Metal vs. Gruppo Mutuionline SpA | Jacquet Metal vs. GungHo Online Entertainment |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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