Correlation Between TAL Education and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both TAL Education 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 TAL Education and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAL Education Group and Jacquet Metal Service, you can compare the effects of market volatilities on TAL Education 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 TAL Education with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAL Education and Jacquet Metal.
Diversification Opportunities for TAL Education and Jacquet Metal
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TAL and Jacquet is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding TAL Education Group 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 TAL Education 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 TAL Education Group 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 TAL Education i.e., TAL Education and Jacquet Metal go up and down completely randomly.
Pair Corralation between TAL Education and Jacquet Metal
Assuming the 90 days trading horizon TAL Education Group is expected to generate 2.35 times more return on investment than Jacquet Metal. However, TAL Education is 2.35 times more volatile than Jacquet Metal Service. It trades about 0.01 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.03 per unit of risk. If you would invest 1,030 in TAL Education Group on September 3, 2024 and sell it today you would lose (95.00) from holding TAL Education Group or give up 9.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAL Education Group vs. Jacquet Metal Service
Performance |
| Timeline |
| TAL Education Group |
| Jacquet Metal Service |
TAL Education and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAL Education and Jacquet Metal
The main advantage of trading using opposite TAL Education and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAL Education 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.| TAL Education vs. Caltagirone SpA | TAL Education vs. Compagnie Plastic Omnium | TAL Education vs. Steel Dynamics | TAL Education vs. Goodyear Tire Rubber |
| Jacquet Metal vs. XLMedia PLC | Jacquet Metal vs. Tencent Music Entertainment | Jacquet Metal vs. ATRESMEDIA | Jacquet Metal vs. TOWNSQUARE MEDIA INC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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