Correlation Between Ecofin Global and Jardine Matheson
Can any of the company-specific risk be diversified away by investing in both Ecofin Global and Jardine Matheson 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 Ecofin Global and Jardine Matheson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofin Global Utilities and Jardine Matheson Holdings, you can compare the effects of market volatilities on Ecofin Global and Jardine Matheson 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 Ecofin Global with a short position of Jardine Matheson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofin Global and Jardine Matheson.
Diversification Opportunities for Ecofin Global and Jardine Matheson
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ecofin and Jardine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecofin Global Utilities and Jardine Matheson Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jardine Matheson Holdings and Ecofin Global 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 Ecofin Global Utilities are associated (or correlated) with Jardine Matheson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jardine Matheson Holdings has no effect on the direction of Ecofin Global i.e., Ecofin Global and Jardine Matheson go up and down completely randomly.
Pair Corralation between Ecofin Global and Jardine Matheson
Assuming the 90 days trading horizon Ecofin Global Utilities is expected to generate 7.69 times more return on investment than Jardine Matheson. However, Ecofin Global is 7.69 times more volatile than Jardine Matheson Holdings. It trades about 0.01 of its potential returns per unit of risk. Jardine Matheson Holdings is currently generating about 0.08 per unit of risk. If you would invest 18,287 in Ecofin Global Utilities on September 12, 2024 and sell it today you would earn a total of 613.00 from holding Ecofin Global Utilities or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecofin Global Utilities vs. Jardine Matheson Holdings
Performance |
| Timeline |
| Ecofin Global Utilities |
| Jardine Matheson Holdings |
Ecofin Global and Jardine Matheson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofin Global and Jardine Matheson
The main advantage of trading using opposite Ecofin Global and Jardine Matheson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofin Global position performs unexpectedly, Jardine Matheson 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 Jardine Matheson will offset losses from the drop in Jardine Matheson's long position.| Ecofin Global vs. Samsung Electronics Co | Ecofin Global vs. Samsung Electronics Co | Ecofin Global vs. Hyundai Motor | Ecofin Global vs. Toyota Motor Corp |
| Jardine Matheson vs. MTI Wireless Edge | Jardine Matheson vs. Roper Technologies | Jardine Matheson vs. Aeorema Communications Plc | Jardine Matheson vs. Allianz Technology Trust |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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