Correlation Between Clean Earth and Jaguar Global
Can any of the company-specific risk be diversified away by investing in both Clean Earth and Jaguar Global 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 Clean Earth and Jaguar Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Earth Acquisitions and Jaguar Global Growth, you can compare the effects of market volatilities on Clean Earth and Jaguar Global 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 Clean Earth with a short position of Jaguar Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Earth and Jaguar Global.
Diversification Opportunities for Clean Earth and Jaguar Global
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Clean and Jaguar is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Clean Earth Acquisitions and Jaguar Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Global Growth and Clean Earth 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 Clean Earth Acquisitions are associated (or correlated) with Jaguar Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Global Growth has no effect on the direction of Clean Earth i.e., Clean Earth and Jaguar Global go up and down completely randomly.
Pair Corralation between Clean Earth and Jaguar Global
Assuming the 90 days horizon Clean Earth Acquisitions is expected to generate 28.15 times more return on investment than Jaguar Global. However, Clean Earth is 28.15 times more volatile than Jaguar Global Growth. It trades about 0.08 of its potential returns per unit of risk. Jaguar Global Growth is currently generating about 0.05 per unit of risk. If you would invest 5.00 in Clean Earth Acquisitions on August 30, 2024 and sell it today you would earn a total of 0.14 from holding Clean Earth Acquisitions or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.71% |
| Values | Daily Returns |
Clean Earth Acquisitions vs. Jaguar Global Growth
Performance |
| Timeline |
| Clean Earth Acquisitions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jaguar Global Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Clean Earth and Jaguar Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Earth and Jaguar Global
The main advantage of trading using opposite Clean Earth and Jaguar Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Earth position performs unexpectedly, Jaguar Global 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 Jaguar Global will offset losses from the drop in Jaguar Global's long position.The idea behind Clean Earth Acquisitions and Jaguar Global Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jaguar Global vs. Hennessy Capital Investment | Jaguar Global vs. AlphaTime Acquisition Corp | Jaguar Global vs. Manaris Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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