Correlation Between Jacquet Metal and Hotel Majestic
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Hotel Majestic 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 Hotel Majestic 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 Hotel Majestic Cannes, you can compare the effects of market volatilities on Jacquet Metal and Hotel Majestic 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 Hotel Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Hotel Majestic.
Diversification Opportunities for Jacquet Metal and Hotel Majestic
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jacquet and Hotel is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Hotel Majestic Cannes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Majestic Cannes 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 Hotel Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Majestic Cannes has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Hotel Majestic go up and down completely randomly.
Pair Corralation between Jacquet Metal and Hotel Majestic
Assuming the 90 days trading horizon Jacquet Metal Service is expected to under-perform the Hotel Majestic. But the stock apears to be less risky and, when comparing its historical volatility, Jacquet Metal Service is 1.25 times less risky than Hotel Majestic. The stock trades about -0.03 of its potential returns per unit of risk. The Hotel Majestic Cannes is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 545,000 in Hotel Majestic Cannes on August 30, 2024 and sell it today you would lose (25,000) from holding Hotel Majestic Cannes or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Hotel Majestic Cannes
Performance |
| Timeline |
| Jacquet Metal Service |
| Hotel Majestic Cannes |
Jacquet Metal and Hotel Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Hotel Majestic
The main advantage of trading using opposite Jacquet Metal and Hotel Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Hotel Majestic 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 Hotel Majestic will offset losses from the drop in Hotel Majestic's long position.| Jacquet Metal vs. Derichebourg | Jacquet Metal vs. Mersen SA | Jacquet Metal vs. Trigano SA | Jacquet Metal vs. Chargeurs SA |
| Hotel Majestic vs. Metalliance SA | Hotel Majestic vs. Entech SE SAS | Hotel Majestic vs. Jacquet Metal Service | Hotel Majestic vs. Boiron SA |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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