Correlation Between Jacquet Metal and X FAB
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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Jacquet Metal Service |
| X FAB Silicon |
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.| Jacquet Metal vs. ArcelorMittal | Jacquet Metal vs. NIPPON STEEL SPADR | Jacquet Metal vs. Reliance Steel Aluminum | Jacquet Metal vs. Superior Plus Corp |
| X FAB vs. Highlight Communications AG | X FAB vs. Transportadora de Gas | X FAB vs. Global Ship Lease | X FAB vs. USWE SPORTS AB |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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