Correlation Between Jacquet Metal and Align Technology
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Align Technology 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 Align Technology 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 Align Technology, you can compare the effects of market volatilities on Jacquet Metal and Align Technology 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 Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Align Technology.
Diversification Opportunities for Jacquet Metal and Align Technology
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jacquet and Align is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology 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 Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Align Technology go up and down completely randomly.
Pair Corralation between Jacquet Metal and Align Technology
Assuming the 90 days horizon Jacquet Metal is expected to generate 2.25 times less return on investment than Align Technology. But when comparing it to its historical volatility, Jacquet Metal Service is 1.75 times less risky than Align Technology. It trades about 0.02 of its potential returns per unit of risk. Align Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 19,092 in Align Technology on September 13, 2024 and sell it today you would earn a total of 3,308 from holding Align Technology or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Align Technology
Performance |
| Timeline |
| Jacquet Metal Service |
| Align Technology |
Jacquet Metal and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Align Technology
The main advantage of trading using opposite Jacquet Metal and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Align Technology 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 Align Technology will offset losses from the drop in Align Technology's long position.| Jacquet Metal vs. ArcelorMittal | Jacquet Metal vs. NIPPON STEEL SPADR | Jacquet Metal vs. Reliance Steel Aluminum | Jacquet Metal vs. Superior Plus Corp |
| Align Technology vs. Superior Plus Corp | Align Technology vs. SIVERS SEMICONDUCTORS AB | Align Technology vs. Norsk Hydro ASA | Align Technology vs. Reliance Steel Aluminum |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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