Correlation Between First American and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both First American 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 First American and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Financial and Jacquet Metal Service, you can compare the effects of market volatilities on First American 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 First American with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Jacquet Metal.
Diversification Opportunities for First American and Jacquet Metal
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Jacquet is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding First American Financial 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 First American 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 First American Financial 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 First American i.e., First American and Jacquet Metal go up and down completely randomly.
Pair Corralation between First American and Jacquet Metal
Assuming the 90 days horizon First American Financial is expected to generate 0.84 times more return on investment than Jacquet Metal. However, First American Financial is 1.18 times less risky than Jacquet Metal. It trades about 0.04 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.01 per unit of risk. If you would invest 4,862 in First American Financial on December 4, 2024 and sell it today you would earn a total of 1,238 from holding First American Financial or generate 25.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
First American Financial vs. Jacquet Metal Service
Performance |
| Timeline |
| First American Financial |
| Jacquet Metal Service |
First American and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Jacquet Metal
The main advantage of trading using opposite First American and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American 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.| First American vs. Mapfre SA | First American vs. MGIC Investment | First American vs. Assured Guaranty | First American vs. Radian Group |
| Jacquet Metal vs. Monument Mining Limited | Jacquet Metal vs. Rayonier Advanced Materials | Jacquet Metal vs. Hyster Yale Materials Handling | Jacquet Metal vs. EAGLE MATERIALS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |