Correlation Between Jacquet Metal and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and MELIA HOTELS 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 MELIA HOTELS 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 MELIA HOTELS, you can compare the effects of market volatilities on Jacquet Metal and MELIA HOTELS 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 MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and MELIA HOTELS.
Diversification Opportunities for Jacquet Metal and MELIA HOTELS
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jacquet and MELIA is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS 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 MELIA HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MELIA HOTELS has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and MELIA HOTELS go up and down completely randomly.
Pair Corralation between Jacquet Metal and MELIA HOTELS
Assuming the 90 days horizon Jacquet Metal is expected to generate 3.75 times less return on investment than MELIA HOTELS. But when comparing it to its historical volatility, Jacquet Metal Service is 1.21 times less risky than MELIA HOTELS. It trades about 0.02 of its potential returns per unit of risk. MELIA HOTELS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 456.00 in MELIA HOTELS on September 14, 2024 and sell it today you would earn a total of 277.00 from holding MELIA HOTELS or generate 60.75% 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. MELIA HOTELS
Performance |
| Timeline |
| Jacquet Metal Service |
| MELIA HOTELS |
Jacquet Metal and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and MELIA HOTELS
The main advantage of trading using opposite Jacquet Metal and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, MELIA HOTELS 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 MELIA HOTELS will offset losses from the drop in MELIA HOTELS'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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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