Correlation Between Jacquet Metal and Carpenter Technology
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Carpenter Technology 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 Carpenter Technology 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 Carpenter Technology, you can compare the effects of market volatilities on Jacquet Metal and Carpenter Technology 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 Carpenter Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Carpenter Technology.
Diversification Opportunities for Jacquet Metal and Carpenter Technology
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jacquet and Carpenter is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Carpenter Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carpenter Technology 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 Carpenter Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carpenter Technology has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Carpenter Technology go up and down completely randomly.
Pair Corralation between Jacquet Metal and Carpenter Technology
Assuming the 90 days horizon Jacquet Metal is expected to generate 27.94 times less return on investment than Carpenter Technology. But when comparing it to its historical volatility, Jacquet Metal Service is 1.9 times less risky than Carpenter Technology. It trades about 0.01 of its potential returns per unit of risk. Carpenter Technology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 12,882 in Carpenter Technology on August 28, 2024 and sell it today you would earn a total of 5,318 from holding Carpenter Technology or generate 41.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Carpenter Technology
Performance |
| Timeline |
| Jacquet Metal Service |
| Carpenter Technology |
Jacquet Metal and Carpenter Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Carpenter Technology
The main advantage of trading using opposite Jacquet Metal and Carpenter Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Carpenter Technology 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 Carpenter Technology will offset losses from the drop in Carpenter Technology's long position.| Jacquet Metal vs. Marie Brizard Wine | Jacquet Metal vs. Treasury Wine Estates | Jacquet Metal vs. GEELY AUTOMOBILE | Jacquet Metal vs. Gol Intelligent Airlines |
| Carpenter Technology vs. SERI INDUSTRIAL EO | Carpenter Technology vs. KENNAMETAL INC | Carpenter Technology vs. Jacquet Metal Service | Carpenter Technology vs. SLR Investment Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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