Correlation Between L3Harris Technologies and Jadestone Energy
Can any of the company-specific risk be diversified away by investing in both L3Harris Technologies and Jadestone Energy 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 L3Harris Technologies and Jadestone Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L3Harris Technologies and Jadestone Energy, you can compare the effects of market volatilities on L3Harris Technologies and Jadestone Energy 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 L3Harris Technologies with a short position of Jadestone Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of L3Harris Technologies and Jadestone Energy.
Diversification Opportunities for L3Harris Technologies and Jadestone Energy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between L3Harris and Jadestone is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding L3Harris Technologies and Jadestone Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jadestone Energy and L3Harris Technologies 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 L3Harris Technologies are associated (or correlated) with Jadestone Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jadestone Energy has no effect on the direction of L3Harris Technologies i.e., L3Harris Technologies and Jadestone Energy go up and down completely randomly.
Pair Corralation between L3Harris Technologies and Jadestone Energy
Assuming the 90 days trading horizon L3Harris Technologies is expected to generate 0.4 times more return on investment than Jadestone Energy. However, L3Harris Technologies is 2.52 times less risky than Jadestone Energy. It trades about 0.04 of its potential returns per unit of risk. Jadestone Energy is currently generating about -0.04 per unit of risk. If you would invest 20,598 in L3Harris Technologies on September 14, 2024 and sell it today you would earn a total of 1,918 from holding L3Harris Technologies or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.34% |
| Values | Daily Returns |
L3Harris Technologies vs. Jadestone Energy
Performance |
| Timeline |
| L3Harris Technologies |
| Jadestone Energy |
L3Harris Technologies and Jadestone Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L3Harris Technologies and Jadestone Energy
The main advantage of trading using opposite L3Harris Technologies and Jadestone Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L3Harris Technologies position performs unexpectedly, Jadestone Energy 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 Jadestone Energy will offset losses from the drop in Jadestone Energy's long position.| L3Harris Technologies vs. Broadcom | L3Harris Technologies vs. Alior Bank SA | L3Harris Technologies vs. Molson Coors Beverage | L3Harris Technologies vs. Ameriprise Financial |
| Jadestone Energy vs. LPKF Laser Electronics | Jadestone Energy vs. Infrastrutture Wireless Italiane | Jadestone Energy vs. Scandic Hotels Group | Jadestone Energy vs. Electronic Arts |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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