Correlation Between Ford and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and JLEN Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and JLEN Environmental Assets, you can compare the effects of market volatilities on Ford 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 Ford with a short position of JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and JLEN Environmental.
Diversification Opportunities for Ford and JLEN Environmental
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and JLEN is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor 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 Ford i.e., Ford and JLEN Environmental go up and down completely randomly.
Pair Corralation between Ford and JLEN Environmental
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.04 times more return on investment than JLEN Environmental. However, Ford is 1.04 times more volatile than JLEN Environmental Assets. It trades about 0.14 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.29 per unit of risk. If you would invest 965.00 in Ford Motor on November 3, 2024 and sell it today you would earn a total of 43.00 from holding Ford Motor or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Ford Motor vs. JLEN Environmental Assets
Performance |
| Timeline |
| Ford Motor |
| JLEN Environmental Assets |
Ford and JLEN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and JLEN Environmental
The main advantage of trading using opposite Ford and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.The idea behind Ford Motor and JLEN Environmental Assets 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.| JLEN Environmental vs. InterContinental Hotels Group | JLEN Environmental vs. URU Metals | JLEN Environmental vs. Eastinco Mining Exploration | JLEN Environmental vs. Cornish Metals |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |