Correlation Between JAPAN TOBACCO and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both JAPAN TOBACCO 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 TOBACCO 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 TOBACCO UNSPADR12 and Jacquet Metal Service, you can compare the effects of market volatilities on JAPAN TOBACCO 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 TOBACCO with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN TOBACCO and Jacquet Metal.
Diversification Opportunities for JAPAN TOBACCO and Jacquet Metal
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between JAPAN and Jacquet is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN TOBACCO UNSPADR12 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 TOBACCO 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 TOBACCO UNSPADR12 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 TOBACCO i.e., JAPAN TOBACCO and Jacquet Metal go up and down completely randomly.
Pair Corralation between JAPAN TOBACCO and Jacquet Metal
Assuming the 90 days trading horizon JAPAN TOBACCO is expected to generate 22.64 times less return on investment than Jacquet Metal. But when comparing it to its historical volatility, JAPAN TOBACCO UNSPADR12 is 1.14 times less risky than Jacquet Metal. It trades about 0.01 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,446 in Jacquet Metal Service on September 12, 2024 and sell it today you would earn a total of 198.00 from holding Jacquet Metal Service or generate 13.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN TOBACCO UNSPADR12 vs. Jacquet Metal Service
Performance |
| Timeline |
| JAPAN TOBACCO UNSPADR12 |
| Jacquet Metal Service |
JAPAN TOBACCO and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN TOBACCO and Jacquet Metal
The main advantage of trading using opposite JAPAN TOBACCO and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN TOBACCO 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 TOBACCO vs. MCEWEN MINING INC | JAPAN TOBACCO vs. GALENA MINING LTD | JAPAN TOBACCO vs. GRIFFIN MINING LTD | JAPAN TOBACCO vs. Calibre Mining Corp |
| Jacquet Metal vs. ArcelorMittal | Jacquet Metal vs. NIPPON STEEL SPADR | Jacquet Metal vs. Reliance Steel Aluminum | Jacquet Metal vs. Superior Plus 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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