Correlation Between Alliance Data and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Alliance Data 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 Alliance Data and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Data Systems and Jacquet Metal Service, you can compare the effects of market volatilities on Alliance Data 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 Alliance Data with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Data and Jacquet Metal.
Diversification Opportunities for Alliance Data and Jacquet Metal
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alliance and Jacquet is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Data Systems 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 Alliance Data 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 Alliance Data Systems 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 Alliance Data i.e., Alliance Data and Jacquet Metal go up and down completely randomly.
Pair Corralation between Alliance Data and Jacquet Metal
Assuming the 90 days trading horizon Alliance Data Systems is expected to generate 0.88 times more return on investment than Jacquet Metal. However, Alliance Data Systems is 1.14 times less risky than Jacquet Metal. It trades about 0.17 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.32 per unit of risk. If you would invest 5,910 in Alliance Data Systems on October 26, 2024 and sell it today you would earn a total of 332.00 from holding Alliance Data Systems or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliance Data Systems vs. Jacquet Metal Service
Performance |
| Timeline |
| Alliance Data Systems |
| Jacquet Metal Service |
Alliance Data and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Data and Jacquet Metal
The main advantage of trading using opposite Alliance Data and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Data 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.| Alliance Data vs. Apple Inc | Alliance Data vs. Apple Inc | Alliance Data vs. Apple Inc | Alliance Data vs. Apple Inc |
| Jacquet Metal vs. INFORMATION SVC GRP | Jacquet Metal vs. CN DATANG C | Jacquet Metal vs. NTT DATA | Jacquet Metal vs. Alliance Data Systems |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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