Correlation Between Jacquet Metal and Whitehaven Coal
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Whitehaven Coal 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 Whitehaven Coal 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 Whitehaven Coal Limited, you can compare the effects of market volatilities on Jacquet Metal and Whitehaven Coal 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 Whitehaven Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Whitehaven Coal.
Diversification Opportunities for Jacquet Metal and Whitehaven Coal
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacquet and Whitehaven is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Whitehaven Coal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitehaven Coal 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 Whitehaven Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitehaven Coal has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Whitehaven Coal go up and down completely randomly.
Pair Corralation between Jacquet Metal and Whitehaven Coal
Assuming the 90 days horizon Jacquet Metal Service is expected to generate 0.77 times more return on investment than Whitehaven Coal. However, Jacquet Metal Service is 1.29 times less risky than Whitehaven Coal. It trades about -0.04 of its potential returns per unit of risk. Whitehaven Coal Limited is currently generating about -0.03 per unit of risk. If you would invest 1,821 in Jacquet Metal Service on September 3, 2024 and sell it today you would lose (231.00) from holding Jacquet Metal Service or give up 12.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Whitehaven Coal Limited
Performance |
| Timeline |
| Jacquet Metal Service |
| Whitehaven Coal |
Jacquet Metal and Whitehaven Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Whitehaven Coal
The main advantage of trading using opposite Jacquet Metal and Whitehaven Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Whitehaven Coal 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 Whitehaven Coal will offset losses from the drop in Whitehaven Coal's long position.| Jacquet Metal vs. XLMedia PLC | Jacquet Metal vs. Tencent Music Entertainment | Jacquet Metal vs. ATRESMEDIA | Jacquet Metal vs. TOWNSQUARE MEDIA INC |
| Whitehaven Coal vs. Zoom Video Communications | Whitehaven Coal vs. Chunghwa Telecom Co | Whitehaven Coal vs. National Retail Properties | Whitehaven Coal vs. PICKN PAY 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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