Correlation Between Jacquet Metal and Vallourec
Can any of the company-specific risk be diversified away by investing in both Jacquet Metal and Vallourec 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 Vallourec 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 Vallourec, you can compare the effects of market volatilities on Jacquet Metal and Vallourec 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 Vallourec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacquet Metal and Vallourec.
Diversification Opportunities for Jacquet Metal and Vallourec
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jacquet and Vallourec is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and Vallourec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vallourec 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 Vallourec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vallourec has no effect on the direction of Jacquet Metal i.e., Jacquet Metal and Vallourec go up and down completely randomly.
Pair Corralation between Jacquet Metal and Vallourec
Assuming the 90 days trading horizon Jacquet Metal is expected to generate 17.38 times less return on investment than Vallourec. But when comparing it to its historical volatility, Jacquet Metal Service is 1.31 times less risky than Vallourec. It trades about 0.01 of its potential returns per unit of risk. Vallourec is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,066 in Vallourec on January 19, 2024 and sell it today you would earn a total of 697.00 from holding Vallourec or generate 65.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacquet Metal Service vs. Vallourec
Performance |
| Timeline |
| Jacquet Metal Service |
| Vallourec |
Jacquet Metal and Vallourec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacquet Metal and Vallourec
The main advantage of trading using opposite Jacquet Metal and Vallourec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal position performs unexpectedly, Vallourec 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 Vallourec will offset losses from the drop in Vallourec's long position.| Jacquet Metal vs. Mersen SA | Jacquet Metal vs. Trigano SA | Jacquet Metal vs. Chargeurs SA | Jacquet Metal vs. Eramet SA |
| Vallourec vs. CGG SA | Vallourec vs. Alstom SA | Vallourec vs. Compagnie de Saint Gobain | Vallourec vs. Bouygues SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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