Correlation Between Jacquet Metal and X FAB

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Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on Jacquet Metal and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and X FAB.

Diversification Opportunities for Jacquet Metal and X FAB

0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between Jacquet and XFB is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and X FAB go up and down completely randomly.

Pair Corralation between Jacquet Metal and X FAB

Assuming the 90 days horizon Jacquet Metal is expected to generate 2.52 times less return on investment than X FAB. But when comparing it to its historical volatility, Jacquet Metal Service is 1.71 times less risky than X FAB. It trades about 0.13 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  446.00  in X FAB Silicon Foundries on September 13, 2024 and sell it today you would earn a total of  48.00  from holding X FAB Silicon Foundries or generate 10.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jacquet Metal Service  vs.  X FAB Silicon Foundries

 Performance 
       Timeline  
Jacquet Metal Service 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jacquet Metal reported solid returns over the last few months and may actually be approaching a breakup point.
X FAB Silicon 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days X FAB Silicon Foundries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, X FAB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Jacquet Metal and X FAB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jacquet Metal and X FAB

The main advantage of trading using opposite Jacquet Metal and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.
The idea behind Jacquet Metal Service and X FAB Silicon Foundries 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.
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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