Correlation Between Alliance Data and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both Alliance Data and JLEN Environmental 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 Alliance Data and JLEN Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Data Systems and JLEN Environmental Assets, you can compare the effects of market volatilities on Alliance Data and JLEN Environmental 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 Alliance Data with a short position of JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Data and JLEN Environmental.
Diversification Opportunities for Alliance Data and JLEN Environmental
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alliance and JLEN is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Data Systems and JLEN Environmental Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLEN Environmental Assets and Alliance Data 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 Alliance Data Systems are associated (or correlated) with JLEN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLEN Environmental Assets has no effect on the direction of Alliance Data i.e., Alliance Data and JLEN Environmental go up and down completely randomly.
Pair Corralation between Alliance Data and JLEN Environmental
Assuming the 90 days trading horizon Alliance Data Systems is expected to generate 1.63 times more return on investment than JLEN Environmental. However, Alliance Data is 1.63 times more volatile than JLEN Environmental Assets. It trades about 0.02 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.37 per unit of risk. If you would invest 6,254 in Alliance Data Systems on November 5, 2024 and sell it today you would earn a total of 18.00 from holding Alliance Data Systems or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Alliance Data Systems vs. JLEN Environmental Assets
Performance |
| Timeline |
| Alliance Data Systems |
| JLEN Environmental Assets |
Alliance Data and JLEN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Data and JLEN Environmental
The main advantage of trading using opposite Alliance Data and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Data position performs unexpectedly, JLEN Environmental 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 JLEN Environmental will offset losses from the drop in JLEN Environmental's long position.| Alliance Data vs. Invesco Physical Silver | Alliance Data vs. Fortune Brands Home | Alliance Data vs. bet at home AG | Alliance Data vs. Home Depot |
| JLEN Environmental vs. Southwest Airlines Co | JLEN Environmental vs. Litigation Capital Management | JLEN Environmental vs. Wizz Air Holdings | JLEN Environmental vs. United Airlines Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |