Correlation Between Jacquet Metal and Herms International
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Herms International 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 Jacquet Metal and Herms International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacquet Metal Service and Herms International Socit, you can compare the effects of market volatilities on Jacquet Metal and Herms International 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 Jacquet Metal with a short position of Herms International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Herms International.
Diversification Opportunities for Jacquet Metal and Herms International
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jacquet and Herms is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Herms International Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herms International Socit and Jacquet Metal 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 Jacquet Metal Service are associated (or correlated) with Herms International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herms International Socit has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Herms International go up and down completely randomly.
Pair Corralation between Jacquet Metal and Herms International
Assuming the 90 days horizon Jacquet Metal is expected to generate 2.01 times less return on investment than Herms International. But when comparing it to its historical volatility, Jacquet Metal Service is 1.45 times less risky than Herms International. It trades about 0.08 of its potential returns per unit of risk. Herms International Socit is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 199,850 in Herms International Socit on September 25, 2024 and sell it today you would earn a total of 31,450 from holding Herms International Socit or generate 15.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Jacquet Metal Service vs. Herms International Socit
Performance |
Timeline |
Jacquet Metal Service |
Herms International Socit |
Jacquet Metal and Herms International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jacquet Metal and Herms International
The main advantage of trading using opposite Jacquet Metal and Herms International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Herms International 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 Herms International will offset losses from the drop in Herms International's long position.Jacquet Metal vs. Nucor | Jacquet Metal vs. ArcelorMittal SA | Jacquet Metal vs. ArcelorMittal | Jacquet Metal vs. Steel Dynamics |
Herms International vs. Martin Marietta Materials | Herms International vs. Heidelberg Materials AG | Herms International vs. GRIFFIN MINING LTD | Herms International vs. Jacquet Metal Service |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
Commodity Directory Find actively traded commodities issued by global exchanges | |
CEOs Directory Screen CEOs from public companies around the world | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |