Correlation Between Jacquet Metal and Keyera Corp
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Keyera Corp 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 Keyera Corp 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 Keyera Corp, you can compare the effects of market volatilities on Jacquet Metal and Keyera Corp 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 Keyera Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Keyera Corp.
Diversification Opportunities for Jacquet Metal and Keyera Corp
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jacquet and Keyera is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Keyera Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyera Corp 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 Keyera Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyera Corp has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Keyera Corp go up and down completely randomly.
Pair Corralation between Jacquet Metal and Keyera Corp
Assuming the 90 days horizon Jacquet Metal is expected to generate 4.51 times less return on investment than Keyera Corp. But when comparing it to its historical volatility, Jacquet Metal Service is 1.05 times less risky than Keyera Corp. It trades about 0.04 of its potential returns per unit of risk. Keyera Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,570 in Keyera Corp on September 2, 2024 and sell it today you would earn a total of 449.00 from holding Keyera Corp or generate 17.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Keyera Corp
Performance |
| Timeline |
| Jacquet Metal Service |
| Keyera Corp |
Jacquet Metal and Keyera Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Keyera Corp
The main advantage of trading using opposite Jacquet Metal and Keyera Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Keyera Corp 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 Keyera Corp will offset losses from the drop in Keyera Corp's long position.The idea behind Jacquet Metal Service and Keyera Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Keyera Corp vs. RETAIL FOOD GROUP | Keyera Corp vs. BURLINGTON STORES | Keyera Corp vs. Pick n Pay | Keyera Corp vs. SPARTAN STORES |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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