Correlation Between Jacquet Metal and Prodways Group
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Prodways Group 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 Prodways Group 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 Prodways Group SA, you can compare the effects of market volatilities on Jacquet Metal and Prodways Group 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 Prodways Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Prodways Group.
Diversification Opportunities for Jacquet Metal and Prodways Group
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jacquet and Prodways is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Prodways Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodways Group SA 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 Prodways Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodways Group SA has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Prodways Group go up and down completely randomly.
Pair Corralation between Jacquet Metal and Prodways Group
Assuming the 90 days trading horizon Jacquet Metal Service is expected to generate 0.53 times more return on investment than Prodways Group. However, Jacquet Metal Service is 1.89 times less risky than Prodways Group. It trades about 0.01 of its potential returns per unit of risk. Prodways Group SA is currently generating about -0.08 per unit of risk. If you would invest 1,811 in Jacquet Metal Service on November 19, 2024 and sell it today you would lose (17.00) from holding Jacquet Metal Service or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Prodways Group SA
Performance |
| Timeline |
| Jacquet Metal Service |
| Prodways Group SA |
Jacquet Metal and Prodways Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Prodways Group
The main advantage of trading using opposite Jacquet Metal and Prodways Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Prodways Group 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 Prodways Group will offset losses from the drop in Prodways Group's long position.| Jacquet Metal vs. Derichebourg | Jacquet Metal vs. Mersen SA | Jacquet Metal vs. Trigano SA | Jacquet Metal vs. Chargeurs SA |
| Prodways Group vs. Balyo SA | Prodways Group vs. Lumibird SA | Prodways Group vs. Chargeurs SA | Prodways Group vs. Figeac Aero 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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