Correlation Between Valero Energy and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Valero Energy 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 Valero Energy and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valero Energy and Jacquet Metal Service, you can compare the effects of market volatilities on Valero Energy 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 Valero Energy with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valero Energy and Jacquet Metal.
Diversification Opportunities for Valero Energy and Jacquet Metal
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valero and Jacquet is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Valero Energy 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 Valero Energy 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 Valero Energy 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 Valero Energy i.e., Valero Energy and Jacquet Metal go up and down completely randomly.
Pair Corralation between Valero Energy and Jacquet Metal
Assuming the 90 days horizon Valero Energy is expected to under-perform the Jacquet Metal. But the stock apears to be less risky and, when comparing its historical volatility, Valero Energy is 1.25 times less risky than Jacquet Metal. The stock trades about -0.16 of its potential returns per unit of risk. The Jacquet Metal Service is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,748 in Jacquet Metal Service on December 10, 2024 and sell it today you would earn a total of 297.00 from holding Jacquet Metal Service or generate 16.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valero Energy vs. Jacquet Metal Service
Performance |
| Timeline |
| Valero Energy |
| Jacquet Metal Service |
Valero Energy and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valero Energy and Jacquet Metal
The main advantage of trading using opposite Valero Energy and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valero Energy 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.| Valero Energy vs. CARDINAL HEALTH | Valero Energy vs. CSSC Offshore Marine | Valero Energy vs. Solstad Offshore ASA | Valero Energy vs. BW OFFSHORE LTD |
| Jacquet Metal vs. Altair Engineering | Jacquet Metal vs. YATRA ONLINE DL 0001 | Jacquet Metal vs. NORWEGIAN AIR SHUT | Jacquet Metal vs. ZhongAn Online P |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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