Correlation Between European Metals and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both European Metals 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 European Metals and JLEN Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and JLEN Environmental Assets, you can compare the effects of market volatilities on European Metals 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 European Metals with a short position of JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and JLEN Environmental.
Diversification Opportunities for European Metals and JLEN Environmental
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between European and JLEN is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings 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 European Metals 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 European Metals Holdings 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 European Metals i.e., European Metals and JLEN Environmental go up and down completely randomly.
Pair Corralation between European Metals and JLEN Environmental
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the JLEN Environmental. In addition to that, European Metals is 1.6 times more volatile than JLEN Environmental Assets. It trades about -0.29 of its total potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.22 per unit of volatility. If you would invest 8,530 in JLEN Environmental Assets on August 24, 2024 and sell it today you would lose (760.00) from holding JLEN Environmental Assets or give up 8.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
European Metals Holdings vs. JLEN Environmental Assets
Performance |
| Timeline |
| European Metals Holdings |
| JLEN Environmental Assets |
European Metals and JLEN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and JLEN Environmental
The main advantage of trading using opposite European Metals and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals 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.| European Metals vs. Synthomer plc | European Metals vs. JB Hunt Transport | European Metals vs. GreenX Metals | European Metals vs. Cizzle Biotechnology Holdings |
| JLEN Environmental vs. Vitec Software Group | JLEN Environmental vs. Associated British Foods | JLEN Environmental vs. Ocean Harvest Technology | JLEN Environmental vs. Tyson Foods Cl |
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.
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