Correlation Between Lindsell Train and Jacquet Metal

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lindsell Train 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 Lindsell Train and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindsell Train Investment and Jacquet Metal Service, you can compare the effects of market volatilities on Lindsell Train 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 Lindsell Train with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindsell Train and Jacquet Metal.

Diversification Opportunities for Lindsell Train and Jacquet Metal

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Lindsell and Jacquet is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lindsell Train Investment 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 Lindsell Train 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 Lindsell Train Investment 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 Lindsell Train i.e., Lindsell Train and Jacquet Metal go up and down completely randomly.

Pair Corralation between Lindsell Train and Jacquet Metal

Assuming the 90 days trading horizon Lindsell Train is expected to generate 4.95 times less return on investment than Jacquet Metal. But when comparing it to its historical volatility, Lindsell Train Investment is 1.5 times less risky than Jacquet Metal. It trades about 0.03 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,591  in Jacquet Metal Service on September 12, 2024 and sell it today you would earn a total of  74.00  from holding Jacquet Metal Service or generate 4.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lindsell Train Investment  vs.  Jacquet Metal Service

 Performance 
       Timeline  
Lindsell Train Investment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Lindsell Train Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Lindsell Train is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Jacquet Metal Service 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Jacquet Metal unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lindsell Train and Jacquet Metal Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lindsell Train and Jacquet Metal

The main advantage of trading using opposite Lindsell Train and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindsell Train 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.
The idea behind Lindsell Train Investment and Jacquet Metal Service pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

Other Complementary Tools

Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Bonds Directory
Find actively traded corporate debentures issued by US companies
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Transaction History
View history of all your transactions and understand their impact on performance