Correlation Between GBS Software and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both GBS Software and Jacquet Metal 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 GBS Software and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GBS Software AG and Jacquet Metal Service, you can compare the effects of market volatilities on GBS Software and Jacquet Metal 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 GBS Software with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBS Software and Jacquet Metal.
Diversification Opportunities for GBS Software and Jacquet Metal
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GBS and Jacquet is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding GBS Software AG and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service and GBS Software 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 GBS Software AG are associated (or correlated) with Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of GBS Software i.e., GBS Software and Jacquet Metal go up and down completely randomly.
Pair Corralation between GBS Software and Jacquet Metal
Assuming the 90 days trading horizon GBS Software AG is expected to generate 1.67 times more return on investment than Jacquet Metal. However, GBS Software is 1.67 times more volatile than Jacquet Metal Service. It trades about 0.31 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.18 per unit of risk. If you would invest 262.00 in GBS Software AG on October 10, 2024 and sell it today you would earn a total of 42.00 from holding GBS Software AG or generate 16.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GBS Software AG vs. Jacquet Metal Service
Performance |
| Timeline |
| GBS Software AG |
| Jacquet Metal Service |
GBS Software and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GBS Software and Jacquet Metal
The main advantage of trading using opposite GBS Software and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBS Software position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| GBS Software vs. QURATE RETAIL INC | GBS Software vs. Costco Wholesale Corp | GBS Software vs. BJs Restaurants | GBS Software vs. Burlington Stores |
| Jacquet Metal vs. 24SEVENOFFICE GROUP AB | Jacquet Metal vs. CITY OFFICE REIT | Jacquet Metal vs. DAIDO METAL TD | Jacquet Metal vs. Casio Computer CoLtd |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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