Correlation Between Jacquet Metal and United Utilities
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and United Utilities 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 United Utilities 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 United Utilities Group, you can compare the effects of market volatilities on Jacquet Metal and United Utilities 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 United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and United Utilities.
Diversification Opportunities for Jacquet Metal and United Utilities
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jacquet and United is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities 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 United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and United Utilities go up and down completely randomly.
Pair Corralation between Jacquet Metal and United Utilities
Assuming the 90 days horizon Jacquet Metal Service is expected to under-perform the United Utilities. But the stock apears to be less risky and, when comparing its historical volatility, Jacquet Metal Service is 1.25 times less risky than United Utilities. The stock trades about -0.14 of its potential returns per unit of risk. The United Utilities Group is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,260 in United Utilities Group on November 7, 2024 and sell it today you would lose (60.00) from holding United Utilities Group or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Jacquet Metal Service vs. United Utilities Group
Performance |
| Timeline |
| Jacquet Metal Service |
| United Utilities |
Jacquet Metal and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and United Utilities
The main advantage of trading using opposite Jacquet Metal and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| Jacquet Metal vs. ArcelorMittal SA | Jacquet Metal vs. Steel Dynamics | Jacquet Metal vs. Nippon Steel | Jacquet Metal vs. NIPPON STEEL SPADR |
| United Utilities vs. GALENA MINING LTD | United Utilities vs. GRIFFIN MINING LTD | United Utilities vs. CHIBA BANK | United Utilities vs. Direct Line Insurance |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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