Correlation Between JAPAN AIRLINES and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both JAPAN AIRLINES 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 JAPAN AIRLINES and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN AIRLINES and Jacquet Metal Service, you can compare the effects of market volatilities on JAPAN AIRLINES 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 JAPAN AIRLINES with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN AIRLINES and Jacquet Metal.
Diversification Opportunities for JAPAN AIRLINES and Jacquet Metal
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JAPAN and Jacquet is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN AIRLINES 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 JAPAN AIRLINES 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 JAPAN AIRLINES 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 JAPAN AIRLINES i.e., JAPAN AIRLINES and Jacquet Metal go up and down completely randomly.
Pair Corralation between JAPAN AIRLINES and Jacquet Metal
Assuming the 90 days trading horizon JAPAN AIRLINES is expected to generate 0.77 times more return on investment than Jacquet Metal. However, JAPAN AIRLINES is 1.31 times less risky than Jacquet Metal. It trades about -0.05 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.04 per unit of risk. If you would invest 1,760 in JAPAN AIRLINES on October 25, 2024 and sell it today you would lose (270.00) from holding JAPAN AIRLINES or give up 15.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN AIRLINES vs. Jacquet Metal Service
Performance |
| Timeline |
| JAPAN AIRLINES |
| Jacquet Metal Service |
JAPAN AIRLINES and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN AIRLINES and Jacquet Metal
The main advantage of trading using opposite JAPAN AIRLINES and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN AIRLINES 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.| JAPAN AIRLINES vs. Cognizant Technology Solutions | JAPAN AIRLINES vs. UPDATE SOFTWARE | JAPAN AIRLINES vs. X FAB Silicon Foundries | JAPAN AIRLINES vs. PKSHA TECHNOLOGY INC |
| Jacquet Metal vs. CHEMICAL INDUSTRIES | Jacquet Metal vs. AIR PRODCHEMICALS | Jacquet Metal vs. Sekisui Chemical Co | Jacquet Metal vs. SEKISUI CHEMICAL |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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