Correlation Between JS Investments and Metropolitan Steel
Can any of the company-specific risk be diversified away by investing in both JS Investments and Metropolitan Steel 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 JS Investments and Metropolitan Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JS Investments and Metropolitan Steel Corp, you can compare the effects of market volatilities on JS Investments and Metropolitan Steel 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 JS Investments with a short position of Metropolitan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of JS Investments and Metropolitan Steel.
Diversification Opportunities for JS Investments and Metropolitan Steel
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between JSIL and Metropolitan is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding JS Investments and Metropolitan Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Steel Corp and JS Investments 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 JS Investments are associated (or correlated) with Metropolitan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Steel Corp has no effect on the direction of JS Investments i.e., JS Investments and Metropolitan Steel go up and down completely randomly.
Pair Corralation between JS Investments and Metropolitan Steel
Assuming the 90 days trading horizon JS Investments is expected to generate 0.97 times more return on investment than Metropolitan Steel. However, JS Investments is 1.03 times less risky than Metropolitan Steel. It trades about 0.07 of its potential returns per unit of risk. Metropolitan Steel Corp is currently generating about -0.09 per unit of risk. If you would invest 1,450 in JS Investments on October 25, 2024 and sell it today you would earn a total of 861.00 from holding JS Investments or generate 59.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.12% |
| Values | Daily Returns |
JS Investments vs. Metropolitan Steel Corp
Performance |
| Timeline |
| JS Investments |
| Metropolitan Steel Corp |
JS Investments and Metropolitan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JS Investments and Metropolitan Steel
The main advantage of trading using opposite JS Investments and Metropolitan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JS Investments position performs unexpectedly, Metropolitan Steel 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 Metropolitan Steel will offset losses from the drop in Metropolitan Steel's long position.| JS Investments vs. Wah Nobel Chemicals | JS Investments vs. Pakistan Hotel Developers | JS Investments vs. Invest Capital Investment | JS Investments vs. WorldCall Telecom |
| Metropolitan Steel vs. Matco Foods | Metropolitan Steel vs. JS Investments | Metropolitan Steel vs. Crescent Steel Allied | Metropolitan Steel vs. Beco Steel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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